Fuel prices in India are updated daily at 6:00 am, a practice that began in June 2017 using the dynamic fuel price method, to reflect real-time changes in global oil prices and currency exchange rates. However, prices may vary from state to state due to factors like taxes and transportation costs.

Current Prices in Major Cities

As of today, October 3, 2025, petrol and diesel prices in some major Indian cities are as follows:

• Delhi: Petrol is around ₹95 per litre, and diesel is approximately ₹88 per litre.
• Mumbai: Petrol rates have dropped to around ₹104, while diesel is priced near ₹95.
• Kolkata: ₹105.41 per litre for petrol and ₹90.76 for diesel.
• Chennai: ₹100.75 per litre for petrol and ₹92.34 for diesel.
• Chandigarh: has the lowest petrol price at ₹94.30 per litre and diesel is also cheapest in Chandigarh at ₹82.45 per litre among all major cities.

Factors Influencing Fuel Prices

Several factors influence the retail prices of petrol and diesel in India:

• Crude Oil Prices: The price of crude oil in the international market is a primary driver. Global political tensions and conflicts, such as the Russia-Ukraine war and the Iran-Israel conflict, can cause fluctuations in crude oil prices, directly impacting India, which imports a significant portion of its crude oil.
• Exchange Rate: Since India imports crude oil, the exchange rate between the Indian Rupee (INR) and the US Dollar (USD) plays a crucial role. A weaker rupee means higher costs for crude oil.
• Taxes: Both the central and state governments impose taxes on petrol and diesel, including excise duty and Value Added Tax (VAT), which significantly affect the final price.
• Refining Costs: The costs associated with refining crude oil into usable petrol and diesel also contribute to the price.
• Supply and Demand: Increased demand and limited supply can also lead to higher fuel prices.
• Dealer Commission & Transportation Costs: The commission paid to fuel dealers by Oil Marketing Companies (OMCs) and the cost of transporting the fuel also influence prices.

Recent Trends and Analysis

Recently, fuel prices have been slashed by ₹5 across the country. This reduction comes at a time when inflationary pressures have been straining average consumers. The decision likely comes after consultations between oil companies and government authorities, aiming to strike a balance between economic growth and affordability.

Impact of High Fuel Prices

High fuel prices can have several adverse effects on the Indian economy:

• Increased Import Bill: Higher crude oil prices can increase India's import bill.
• Inflation: Increased transportation costs can lead to higher prices for goods, resulting in inflation.
• Economic Slowdown: High fuel prices can affect economic activities, slowing down the economic growth rate.

Government Initiatives

The Indian government has been taking steps to mitigate the impact of rising fuel prices:

• Reducing Customs Duty: The Central Budget for 2022-23 reduced customs duty on some chemicals used in petroleum refining to lower refining costs.
• Promoting Biofuels: The government aims to blend 20% ethanol in petrol by 2025-26 to reduce imports and pollution.
• Encouraging Indigenous Fuel Sourcing: India is focusing on increasing domestic oil and gas production to reduce reliance on imports.

Global Context

In October 2025, global factors continue to play a crucial role. Geopolitical risks, such as the Russia-Ukraine conflict and tensions in the Middle East, impact crude oil prices. The Organization of the Petroleum Exporting Countries (OPEC) and its allies' decisions regarding production levels also influence global supply and prices.