Iran-Israel Tensions Push Premium Fuel Prices Up in India, XP100 Petrol Sees Sharp Hike

Escalating tensions in West Asia have led to a surge in global crude oil prices, prompting Indian oil companies to raise premium fuel rates, while keeping regular petrol and diesel prices largely unchanged.

Pune | April 1, 2026: Rising geopolitical tensions between Iran and Israel have begun impacting fuel prices in India, with state-run oil companies increasing the rates of premium petrol and diesel variants amid a sharp spike in global crude oil markets.

Indian Oil Corporation (IOC) has raised the price of its high-octane XP100 petrol by ₹11 per litre, taking it from ₹149 to ₹160 per litre in Delhi. Premium diesel, sold under the Xtra Green brand, has also seen a marginal increase, rising to ₹92.99 per litre from ₹91.49.

The hike comes at a time when global energy markets are experiencing volatility due to the ongoing conflict in West Asia. Disruptions in critical supply routes, particularly the Strait of Hormuz-which handles a significant share of global oil shipments-have tightened supply and pushed crude oil prices above the $100 per barrel mark.

Despite the surge in global prices, retail rates of regular petrol and diesel in India have largely remained stable. In Delhi, petrol continues to be priced at around ₹94–95 per litre, while diesel remains close to ₹87–88 per litre. This stability is attributed to recent government measures, including cuts in excise duties aimed at cushioning consumers from international price shocks.

However, the burden of rising global crude costs is increasingly being absorbed by oil marketing companies, which are reportedly facing significant under-recoveries. Industry estimates suggest that actual market-linked prices could be substantially higher if fully passed on to consumers, highlighting the growing fiscal strain.

The impact of the geopolitical crisis is also visible across other fuel segments. Aviation turbine fuel (ATF) prices recently surged dramatically, briefly crossing ₹2 lakh per kilolitre before being partially revised. Similarly, commercial LPG cylinder prices have risen sharply, reflecting the broader upward pressure on energy costs.

Experts note that premium fuels such as XP100 are typically used in high-performance vehicles and luxury segments, allowing oil companies to adjust pricing in this category without significantly affecting the broader population. This selective pricing strategy helps shield mass consumers while partially offsetting losses.

Globally, the energy market remains on edge as the conflict continues to disrupt supply chains. Analysts warn that if tensions persist or escalate further, crude oil prices could witness additional spikes, potentially leading to broader fuel price revisions in India in the coming weeks.

For now, the government appears focused on maintaining price stability for everyday fuels, balancing inflation concerns with the financial health of oil companies. However, continued volatility in global markets suggests that fuel pricing in India may remain under pressure in the near term.

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