As of early Tuesday, rumors of a ₹25 increase in fuel prices have been labeled as fake news by officials. The government has maintained a unique position by not raising fuel prices for four years.

The Ministry stated, “There is no proposal to increase petrol and diesel prices currently before the government.” This statement aims to reassure citizens amid rising concerns over supply issues.

Despite international crude oil price fluctuations, the government is committed to keeping fuel prices stable. Observers note that this policy reflects an effort to shield consumers from global market volatility.

Key points from the Ministry:

• Petrol and diesel shortages are worsening across Andhra Pradesh.
• The government is exploring alternative routes to ensure an uninterrupted supply of crude oil.
• Citizens are urged not to believe in fake news regarding potential fuel price hikes.

The government’s proactive stance against misinformation highlights its commitment to transparency. However, officials have not confirmed how long the current stability can last amid ongoing global pressures.

In a surprising turn of events, the Indian government has enacted a significant cut in excise duty on petrol and diesel, a move that comes as global crude prices surge. Previously, the excise duty on petrol stood at Rs 13 per litre, but as of March 27, 2026, it has been slashed to Rs 3 per litre. Diesel, which had an excise duty of Rs 10 per litre, now faces a complete removal of this tax, bringing it down to zero.

This decisive action is expected to have far-reaching implications. The government anticipates a staggering revenue loss of INR 1.75 lakh crore annually due to this excise duty reduction. Oil marketing companies, which determine retail fuel prices based on global crude prices, exchange rates, and their margins, have been grappling with significant losses, estimated at around Rs 24 per litre on petrol and Rs 30 per litre on diesel.

Despite the excise duty cut, retail pump prices have remained unchanged. This raises questions about how quickly oil marketing companies will pass on the benefits of the duty cut to consumers. Finance Minister Nirmala Sitharaman stated, “The reduction in excise duty will provide protection to consumers from rise in prices,” highlighting the government’s intent to shield consumers from the impact of escalating fuel costs.

However, the backdrop of this decision is critical. International crude prices have surged dramatically from around $70 per barrel to nearly $122 per barrel, creating a challenging environment for both consumers and oil companies. The government faced a choice between passing on the full impact to consumers or absorbing part of the shock, as noted by Oil Minister Hardeep Singh Puri.

Experts suggest that while the cut may not lead to cheaper fuel, it could prevent prices from rising further amid global uncertainty. The benefit of the duty cut appears to be aimed at stabilizing prices rather than reducing them outright. As one expert pointed out, “The cut may not make fuel cheaper, but it could stop prices from rising further at a time of global uncertainty.” This perspective underscores the delicate balance the government is trying to maintain in a volatile market.

Moreover, the government has also imposed export duties of INR 21.5 per litre on diesel and INR 29.5 per litre on aviation turbine fuel (ATF), further complicating the landscape for oil companies. The long-term impact of the excise duty cut on retail fuel prices remains uncertain, and details remain unconfirmed regarding how this will play out in the coming months.

As the situation evolves, consumers and industry stakeholders alike are left to navigate the implications of this significant policy shift. The government’s decision reflects a broader strategy to manage public sentiment and economic stability ahead of state elections, amidst rising fuel costs and potential public concern.

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As of March 11, 2026, the petrol price in Chennai stands at ₹100.80 per litre, while diesel is priced at ₹92.39 per litre. This pricing reflects the ongoing dynamics in the global oil market and local taxation policies that govern fuel costs in India.

Market Influences

The pricing of petrol in India is significantly influenced by global crude oil prices, which currently hover around $90 per barrel. Government sources have indicated that petrol and diesel prices are unlikely to increase unless crude oil prices exceed $130 per barrel. This threshold is critical for determining potential adjustments in fuel pricing.

Supply Stability

Despite concerns stemming from the ongoing conflict in West Asia, which has raised alarms about potential shortages, India maintains a robust supply chain for fuel. The country has sufficient fuel reserves, with approximately 250 million barrels of crude and refined petroleum products held in stock, providing a supply buffer of 7-8 weeks.

Government Assurances

In light of these developments, government officials have reassured the public that petrol and diesel prices will remain stable. “Petrol and Diesel prices are unlikely to increase as we have enough stock,” stated government sources, aiming to alleviate public concerns regarding fuel availability.

Public Sentiment

The ministry has prioritised domestic LPG supply to households and introduced a 25-day inter-booking period to avoid hoarding and black marketing. This statement from the Ministry of Petroleum and Natural Gas underscores the urgency of addressing the current challenges in the LPG supply chain. With rising global tensions impacting fuel availability, the government has mandated oil refineries to ramp up production specifically for domestic use.

The recent geopolitical conflicts in West Asia have created significant disruptions in the global fuel supply chain, prompting the government to take decisive action. In response, the Ministry has prioritized domestic LPG supply to ensure that households are adequately serviced. This move is particularly critical as many families rely on LPG for cooking and heating.

Measures to Combat Hoarding and Ensure Supply

To further stabilize the situation, a 25-day inter-booking period has been implemented. This measure aims to prevent hoarding and black marketing of LPG, which has become a concern as demand surges. The government is keen to ensure that the available supply is distributed fairly and efficiently to meet the needs of the population.

In addition to prioritizing household supply, the government is also focusing on essential sectors. Non-domestic supplies from imported LPG are being directed towards critical services such as hospitals and educational institutions. This strategic allocation is intended to safeguard public health and education during these challenging times.

Impact on Commercial LPG Supply

However, the situation remains precarious. Reports indicate that LPG supply disruptions have led to refill delays ranging from 2 to 8 days in major cities like Mumbai. Furthermore, the supply of commercial LPG cylinders has been completely halted, significantly affecting hotels and restaurants. P C Rao, a representative from the hospitality sector, noted, “Only about 10% of hotels and restaurants in Bengaluru received their LPG supply today.” This highlights the severe impact on businesses that rely on consistent LPG access for their operations.

To address the ongoing challenges, a committee composed of three Executive Directors from Oil Marketing Companies has been established. This committee is tasked with reviewing LPG supply requests from non-domestic sectors, aiming to streamline the process and ensure that essential services receive the fuel they need.

Looking Ahead

As the government continues to navigate these complexities, the focus remains on stabilizing the LPG supply chain and ensuring that households are prioritized. The introduction of new measures reflects a proactive approach to managing the crisis and mitigating the effects of global disruptions. Stakeholders are closely monitoring the situation, and further developments are expected as the government seeks to balance domestic needs with the realities of the global fuel market.

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The price of a 14.2-kg domestic LPG cylinder was hiked due to geopolitical disruptions to fuel supply. This increase has now been compounded by a recent decision from oil marketing companies to raise the prices of non-subsidised domestic LPG gas cylinders by 60 rupees across metropolitan cities in India.

Recent Developments

The price for a 14.2 kilogram gas cylinder has been increased from 853 rupees to 913 rupees in Delhi. New rates for LPG cylinders in other major cities include 912.50 rupees in Mumbai, 939 rupees in Kolkata, and 928.50 rupees in Chennai. Additionally, rates for commercial LPG gas cylinders have seen an increase of 115 rupees.

In response to the rising prices and to curb hoarding, the Indian government has extended the LPG booking period from 21 days to 25 days. This measure aims to stabilize supply amidst growing concerns over availability.

Impact on the Hospitality Sector

An acute shortage of commercial LPG cylinders is disrupting the hospitality sector in cities such as Mumbai, Bengaluru, and Chennai. Reports indicate that at least 20 percent of the hotels and restaurants in Mumbai have had to shut down temporarily due to the LPG cylinder shortage.

AHAR – the Indian Hotels and Restaurants Association, has expressed concerns, stating, “Despite being a basic operational requirement for restaurants and hotels, commercial cylinders are becoming increasingly difficult to obtain through proper channels.” This sentiment underscores the challenges faced by the industry as it grapples with supply issues.

Government Response

In light of these challenges, the Government of India has invoked the Essential Commodities Act to ensure the supply of natural gas. Officials have emphasized that the supply of natural gas must be treated as a priority allocation, ensuring that it is maintained at one hundred percent of the average past six-month average gas consumption.

Looking Ahead

Details remain unconfirmed regarding the exact impact of ongoing geopolitical conflicts on future gas cylinder prices. Observers are closely monitoring the situation as it develops, with many hoping for a resolution that stabilizes both prices and supply in the near future.

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Context of the Order

The order was enacted under the Essential Commodities Act of 1955, reflecting the government’s urgent need to ensure equitable distribution of natural gas amidst these global challenges. The disruptions have prompted suppliers to invoke force majeure, leading to a diversion of gas supplies to priority sectors, as the government seeks to stabilize domestic energy needs.

Priority Sectors Defined

The regulation categorizes gas consumers into four priority sectors. Priority Sector I includes domestic piped natural gas (PNG), compressed natural gas (CNG), LPG production, and essential pipeline operational needs, which will receive 100% of their average gas consumption. Priority Sector II encompasses fertilizer plants, which are allocated 70% of their average gas consumption. Priority Sector III, which includes tea industries and other industrial consumers connected to the national gas grid, will receive 80% of their average consumption. Lastly, Priority Sector IV applies to industrial and commercial consumers supplied through City Gas Distribution (CGD) networks, also receiving 80% of their average consumption.

Impact on Non-Priority Sectors

To meet the demands of these priority sectors, the regulation allows for the curtailment of gas supplies from non-priority sectors. This means that industries not classified as essential may face significant reductions in their gas allocations. Additionally, oil refineries have been directed to reduce their gas consumption to approximately 65% of their average usage over the past six months, a move aimed at reallocating resources to more critical areas.

Management and Compliance

The Gas Authority of India Limited (GAIL) has been tasked with managing the diversion and redistribution of natural gas under this new order. All entities involved in the natural gas sector, including major companies like ONGC, Reliance Industries Limited, Oil India Limited, and Vedanta Limited, are required to furnish detailed information regarding their production, imports, stocks, allocation, and consumption to the Petroleum Planning and Analysis Cell. This transparency is crucial for effective management of the gas supply chain during these turbulent times.

Government’s Commitment to Energy Security

The government’s actions underscore its commitment to ensuring energy security for citizens amid ongoing uncertainties in global oil and energy markets. The prioritization of LPG supply for households is a critical aspect of this strategy, as officials aim to mitigate the impact of the West Asia crisis on domestic energy availability. Non-domestic supplies from imported LPG are being prioritized for essential sectors such as hospitals and educational institutions, further emphasizing the government’s focus on safeguarding public welfare.

The Natural Gas (Supply Regulation) Order, 2026 marks a pivotal moment for India’s energy policy, reflecting the need for adaptive measures in response to global disruptions. As the situation evolves, the effectiveness of these regulations in ensuring equitable gas distribution will be closely monitored by all stakeholders involved.

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