Rumors have been swirling across social media and news channels, suggesting a steep hike of ₹25 to ₹28 per litre immediately after the conclusion of the ongoing assembly elections. The source of this anxiety is understandable—global turmoil, a war in West Asia, and the dreaded “under-recovery” jargon that often precedes a price shock.
But is there truth to these rumors? In a significant development, the Government of India has finally broken its silence. Here is the complete, ground-level reality of where fuel prices stand right now, why the panic started, and what the government is actually saying.
The Panic Button: Why Did the Rumors Start?
To understand the government’s response, we first have to look at why the public was bracing for impact.
The Geopolitical Storm
The primary driver of the fear was the escalating conflict involving the US, Israel, and Iran. The fighting has directly threatened the Strait of Hormuz—a narrow strip of water through which roughly 20% of the world’s oil passes . For India, which imports 88% of its crude oil needs, this is a direct hit to the supply chain .
The Brokerage Report
The trigger for the specific figure of ₹25-28 came from a report by Kotak Institutional Equities. In their analysis, they suggested that with crude oil prices hovering near $120 per barrel—up from average levels of $70 last year—the math for oil companies stops adding up. They projected that to cover the losses, retailers would have to hike prices by that significant margin once the election code of conduct was lifted .
The “Under-recovery” Nightmare
To put it simply, “under-recovery” is the money oil companies lose when they sell fuel below cost price. According to official data shared recently, state-owned fuel retailers are currently losing approximately ₹20 per litre on petrol and a staggering ₹100 per litre on diesel . When losses are that high, consumers naturally assume a price correction is inevitable.
Government’s Clarification: “No Such Proposal
In response to the growing panic, the Ministry of Petroleum and Natural Gas issued a sharp clarification on Thursday, April 23. The ministry took to social media and press briefings to label the reports as “mischievous and misleading,” designed specifically to “create fear and panic amongst the citizens” .
The Official Word
Sujata Sharma, Joint Secretary in the Ministry of Petroleum, stated unequivocally, “There is no such proposal under consideration by the Government.” She emphasized that despite the extreme volatility in global markets, the government’s primary effort has been to “keep the price stable” .
The “Four-Year Freeze”
To back up their stance, the government pointed out a unique fact: India is perhaps the only country in the world where petrol and diesel prices have not increased in the last four years. While fuel prices shot up by 85% in some nations, India has kept the rates steady since April 2022 .
This has been possible because when global prices dipped in the past, oil companies made profits; they are now using those reserves (and government support) to absorb the current shock.
The Math Behind the Stability
So, how is the government managing to hold the line when crude is over $100 a barrel?
1. The Excise Duty Cut
The government recently slashed the excise duty on petrol and diesel by ₹10 per litre. This was a tactical move to reduce the tax burden on the fuel, allowing the base price to rise internationally without raising the retail price for you .
2. The Windfall Tax
To ensure that local fuel doesn’t get sold abroad for a higher profit (export), the government re-imposed a windfall tax on diesel and jet fuel exports. This “motivates” refiners to prioritize the domestic market, keeping supply chains robust .
3. Fortnightly Reviews
The government has moved to a dynamic review system. Instead of setting prices in stone, authorities are now reviewing the situation every 15 days. This allows them to respond to the volatile West Asia situation in real-time without panicking the markets with sudden daily fluctuations .
What About CNG and Piped Gas?
While the news on petrol and diesel is stable for now, there has been a slight adjustment in the natural gas segment. The government has raised the regulated gas price to $7 per mmBtu. This primarily affects the CNG (automobiles) and PNG (home cooking) sectors, as well as fertilizers. However, even with this hike, the government maintains that the burden on the common man has been minimized compared to the global spikes .
The “Wait and Watch” Reality
Let’s be transparent here: the government is fighting a losing battle against math if the war continues.
While they have denied a current proposal, the officials admitted that the financial stress is real. The daily under-recovery is estimated to be around ₹2,400 crore roughly .
The Kotak report made a valid point: if the crude prices stay at $120, an 80% probability exists that prices will have to be revised post-elections . However, the government’s statement suggests that if a hike happens, it will likely be a gradual, “calibrated” move, not an overnight shock of ₹28, and it will only happen if the Strait of Hormuz closure becomes a long-term reality .
Conclusion: Should You Worry?
For now, you can breathe easy. The Government of India has drawn a line in the sand. As of April 23, 2026, there is no plan to hike petrol and diesel prices .
The government’s message is clear: They are willing to absorb massive losses (billions of rupees) to shield the common citizen from geopolitical warfare they had no part in creating. However, the situation in West Asia remains “dynamic.” If the ships don’t sail through the Strait of Hormuz for many more months, the pressure will become unbearable, even for the government.
The Takeaway for the Common Citizen:
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Short term: Prices will remain stable. Fill up your tank without fear of an immediate spike.
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Medium term: Keep an eye on the news regarding the Iran-Israel/US conflict. Peace in the Gulf equals stable prices in India.
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Reality Check: We are living in “difficult times” globally. While the government is holding the price umbrella for now, the rain of expensive crude is hammering down on the economy. Be mindful of your fuel consumption, because even if the price doesn’t go up today, the cost to the nation is still very high .