Fuel prices continue to be a significant factor impacting household budgets and the overall economy in India. As of August 28, 2025, daily revisions reflect the dynamic interplay of global crude oil prices, currency exchange rates, and government taxation policies. Here’s a snapshot of the current petrol and diesel prices in major Indian cities:

Metro City Prices:

• Delhi: Petrol is retailing at Rs. 94.77 per litre, while diesel stands at Rs. 87.67 per litre.
• Mumbai: Petrol prices are at Rs. 103.50 per litre, and diesel is priced at Rs. 90.03 per litre.
• Kolkata: Petrol costs Rs. 105.41 per litre, with diesel at Rs. 92.02 per litre.
• Chennai: Petrol is available for Rs. 100.80 per litre, and diesel is at Rs. 92.39 per litre.
• Bangalore: Petrol is priced at Rs. 102.92 per litre and diesel at Rs 90.99 per litre.

Factors Influencing Fuel Prices:

Several elements combine to determine the retail prices of petrol and diesel in India:

• Crude Oil Costs: The price of crude oil in the international market is a primary driver, given India's reliance on imports.
• Exchange Rate: The rupee-dollar exchange rate plays a crucial role as crude oil transactions are usually in US dollars.
• Taxes and Duties: Central and state government levies, including excise duty and Value Added Tax (VAT), significantly impact the final price. VAT rates vary across states, leading to price differences.
• OMC Costs and Dealer Commission: The costs incurred by oil marketing companies (OMCs) in refining and distributing fuel, along with dealer commissions, are factored into the retail price.

Dynamic Pricing Mechanism

Since June 2017, India has followed a dynamic pricing mechanism, allowing for daily revisions of petrol and diesel prices to reflect changes in crude oil costs and currency exchange rates. These revisions occur daily at 6:00 AM.

Regional Price Variations

Fuel prices differ across states due to varying VAT rates. For example, on August 28, 2025:

• Chandigarh: Petrol is priced at Rs. 94.30 per litre.
• Patna: Petrol is retailing at Rs 105.75 per litre.
• Itanagar: Petrol is retailing at Rs 90.97 per litre.
• Andhra Pradesh: Petrol rates were recorded at Rs 109.50 per litre.
• Arunachal Pradesh: Petrol price was seen at Rs 92.40 per litre.

Global Context

Geopolitical tensions, particularly in the Middle East, can impact crude oil supply and, consequently, fuel prices in India. Monitoring global developments and their potential impact on the oil market remains crucial.