Asia Essentials - 18 May 2026

Research evidence excerpt

Asia Essentials - 18 May 2026

Flashnote

15 May 2026

Oil, Gas & Consumable Fuels

India Fuel Retail India

Modest fuel price increase, more to come?

Baiju

Joshi

What's new

• The government has raised petrol and diesel prices by ~₹3/litre (effective Figure 1 - India Petrol Price build-up

immediately), marking the first revision since the ₹2/litre cut implemented

in 2022. In conjunction, city-gas distributors, IGL and MGL, also revised the Petrol Price Build-up (Rs/ltr) 16

price of CNG by Rs2/kg in Delhi and Mumbai, respectively (link). 12 4 16 98

Why it matters

• As highlighted a month ago in Significant under-recoveries; brace for higher

pump prices, Indian OIl Marketing Companies were effectively subsidising Refinery Excise Dealer State Marketing Retail

Transfer Duty Margin VAT Loss Price

consumers by Rs18/Rs35 per litre on petrol/diesel. Since then, despite the Price

volatility, brent crude price is still around US$105/bbl, with product cracks

still elevated (albeit, diesel cracks have moderated slightly). Source: PPAC, Macquarie Research, April 2026

Þ As a result, OMCs continue to make marketing margin losses of about Figure 2 - India Diesel Price build-up

Rs16/Rs24 per litre on petrol/diesel (assuming spot petrol-diesel pricing

of US$135-150/bbl). Given the small price hikes compared to actual Diesel Price Build-up (Rs/ltr)

losses, we do not rule out further price hikes, especially if crude prices 13

90 8 3 24 91 continue to stay elevated.

Þ Every US$1/bbl change in input costs equals ~5% impact on OMCs'

EBITDAs holding all else equal, with a break-even crude price of ~US

$80-85/bbl.

• Previously, the government had cut excise duties on petrol and diesel by TransferRefinery ExciseDuty MarginDealer StateVAT MarketingLoss RetailPrice