Fuel prices in India were hiked for the first time in four months on Tuesday, ending an informal freeze on prices of petrol and diesel owing to assembly elections in states like Uttar Pradesh and Uttarakhand.

Diesel and petrol prices have been hiked by 80 paise per litre across the country. A litre of petrol in Delhi will now cost ₹96.21 compared with ₹95.41 previously. A litre of diesel will now cost ₹87.47 in the national capital as against ₹86.67 earlier.

In Mumbai, petrol and diesel prices remain the highest across metros. While a litre of petrol will cost ₹110.82 in the financial capital, diesel will set you back by ₹95. In Chennai, petrol will cost ₹102.16 per litre and diesel ₹92.19.

The price hike comes at a time when Brent crude – the international benchmark – is hovering over $110 a barrel amid supply concerns due to the Russia-Ukraine war.

India imports around 85% of its annual oil requirement.

Domestic cooking gas gets costlier too

The price of domestic LPG cylinder has also been hiked by ₹50 in cities like Delhi and Mumbai. This is the first hike in cooking gas prices since October 6, 2021.

A 14.2-kg non-subsidised LPG cylinder will now cost ₹949.50 in the national capital, while in Chennai you will have to shell out ₹965.50.

This comes days after bulk prices of diesel were hiked by ₹25 per litre, prompting bulk buyers of diesel to turn to getting their fill from retail fuel outlets.

Last week, aviation fuel prices were hiked for the sixth time this year, posing a serious threat to the nascent recovery seen by Indian airlines recently.

Aviation turbine fuel (ATF) prices witnessed an 18% jump, taking it to an all-time high of ₹110,666.29 per kilolitre in Delhi.

The steep rise in crude oil prices can cost the government over ₹1 lakh crore in the next financial year if the Centre continues to levy the reduced taxes on petrol and diesel, according to a report by SBI Research.

This will also affect India's current account deficit and inflation as the country imports around 85% of its annual oil requirement.

"If crude oil prices are at an average of $100/bbl., inflation is likely to increase by 52-65 basis points," SBI Research wrote in a report. "Every $10/bbl increase in Brent crude price will lead to an increase in inflation by 20-25 bps."

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