India’s fuel pricing cycle tightened up even more frivolously on April 1st, 2026, with State-run oil marketing companies (OMCs) increasing commercial LPG cylinder and Aviation Turbine Fuel (ATF) prices, as a result of rising global crude price and supply chain problems due to geopolitical tensions in the West Asia region.
Commercial LPG Prices Rise Again, ATF Surges Sharply In April Revision
The Press Trust of India (PTI) has reported the 19 Kg Commercial LPG Cylinder’s price in Delhi is now going for ₹2,078.50, reflecting a 195.50 rise from previous levels. Kolkata’s increase is even greater, it’s now ₹218 compared to the previous price. The smaller sized (5 Kg) free trade LPG cylinder will also see an increase of ₹51 to ₹549 when they are refilled.
This is now the second upward revision in under a month, as on March 7th, commercial LPG cylinders went from ₹1,768.50 to ₹1,883.
However, retail-grown domestic prices of LPG are still the same., with 14.2 kg retail cylinder in Delhi still at ₹913, despite a prior increase of ₹60 in March!
ATF Prices More Than Double, Prompting Government Intervention
Indication of sharper movement can be seen in aviation fuel. Aviation Turbine Fuel became ₹2,07,341.22 for Domestic airline in Delhi; an increase of ₹1,00,703.08 or an increase of 114.55%, according to Hindustan Times.
Aviation Turbine Fuel has similarly increased in other metro areas.
ATF for International airlines would be $1,690.81 per kiloletre (for Non-Integrated airlines) as compared to $816.91 per kiloletre as before; this would be reflective of the global benchmarks on ATF pricing.
In India, The ATF is Deregulated and Repriced Monthly Based on International Benchmark Prices. And as such is likely to be the first to respond to significant worldwide price shocks.
After the dramatic rise in ATF prices, the government of India took action, and instructed OMCs not to pass on the increases to domestic airline operators. As a result, the revised ATF price for domestic scheduled flights at Delhi’s airport was modified (to ₹1,04,927 per kilolitre).
The OMC said that they revised prices down to prevent complete cost pass-through to the domestic airline operators. Civil Aviation Minister K. Ram Mohan Naidu said that only a staggered 25% increase would be passed on. In addition, Private jets, charter operations, and unscheduled flights continue to incur costs of at least ₹2,07,341.22 per kilolitre.
West Asia Tensions And Crude Supply Risks Drive Price Revisions
These adjustments are correlated to the increasing tensions to West Asia, namely between the US, Israel and Iran, which have led to increased concerns regarding transportation of crude oil via the Strait of Hormuz (which accounts for a high percentage of global oil transported).
As the majority of oil is imported into India, this results in the increase of the price of fuel, regardless of how it is classified (i.e. deregulated or not).
OMC’s review their pricing on a monthly basis of non-sensitive petroleum products i.e. ATF, by utilizing international benchmarks, resulting in an immediate and significant increase in price of aviation fuel.
Why Domestic LPG Prices Remain Unchanged Despite Global Pressure
Despite the increase in both commercial LPG and ATF, there has been no revision to domestic LPG prices during the current pricing cycle.
Pricing discrepancies are indicative of structural and policy implementation in how prices are applied.
Domestic liquefied petroleum gas (LPG) remains partially insulated from complete market volatility as it has a direct impact on household consumption. Therefore, any sudden price increases will likely not be implemented as one large versus staggered price increase.
The oil marketing companies (OMCs) across many categories of fuels have the ability to internally balance their volumes, margins from LPG sales used in commercial businesses and aviation fuels may help offset the impact of holding domestic LPG prices static for a period of time.
Domestic LPG prices are adjusted less frequently than fully deregulated fuels (e.g. jet fuel) and in a more measured manner. Therefore, there will be a lag between global price fluctuations and corresponding retail price adjustments.
Although it does not imply any immunity, if crude prices remain high globally, future cycles will likely include upward adjustments to domestic LPG prices.
Rising Input Costs Expected To Impact Aviation, Food Services, And Logistics
The ripple effect follows you everywhere!
The current adjustments to prices will create pressure on all industries primarily through increased input costs as opposed to immediate retail price shocks.
Aviation
Fuel is approximately 35% to 45% of the total operating costs for the airline industry. While prices have fallen somewhat in comparison with the recent past, the effective ATF price for domestic carriers remains approximately ₹8,000-₹10,000 higher than in prior pricing cycles, resulting in a potential 8% to 12% increase in operation costs.
Historically, airlines have passed on such increases to customers through ticket prices. If ATF prices continue at elevated levels over multiple pricing cycles, it is expected that airfares could increase by 10% to 20% on ticket prices.
Food Services And Hospitality
Restaurants, hotels, and catering businesses depend heavily on commercial LPG as one of their primary fuel sources for cooking and heating food. For every ₹195-218 increase in cost per cylinder this means that depending upon the size of the restaurant, costs to produce and serve one meal will rise.
According to estimates, between five and eight percent of a mid-sized restaurant’s operating cost are due to LPG. Increase in cost will cause operating costs to increase between one and two percent in total; usually listed as some combination of an increase in the menu price and rationalisation of costs.
Caterers, who operate at a much larger scale (multiple cylinders used daily) have potential for much larger increases in costs associated with LPG.
Logistics And Supply Chains
Although prices of petrol and diesel have not yet changed at retail levels, industrial diesel prices and bulk fuel prices have risen significantly. The retail price for industrial diesel was recently lifted by ₹21.92/litre raising it to ₹109.59 in Delhi.
These price increases directly affect freight and logistics costs. Transport costs generally constitute 8-12% of the final cost of goods sold in the food distribution and retail sector. An ongoing increase in the cost of fuel used in transport will result in an increase in the price of the end product by approximately 2-5% over time.
FMCG And Packaged Goods
In manufacturing, packaging, and distribution, fuel costs have a large impact on the profitability of companies that make fast moving consumer goods (FMCG) and packaged goods. Companies are generally able to increase prices step-by-step and/or decrease unit sizes for FMCG products as they are unable to pass immediate cost increases onto consumers with a price increase due to competitive reasons.
Historically, logistics and energy costs that are increased by 10% will increase the price of FMCG goods by 1.5-3% over subsequent quarters.
Small Businesses
Small-scale operators like tea stalls, bakeries, and street vendors are typically reliant on LPG for a significant portion of their daily operating costs, and due to their size have a lower tolerance to absorb the impact of price increase; therefore, they are more sensitive to frequent price revisions.
Policy Measures And Supply Position
The Government has taken a number of steps in managing gasoline and diesel price pressure in general. The Excise Duty on petrol has been lowered to ₹3/litre, and tariff on diesel export has been lowered to ₹0/litre. The government has also imposed a windfall tax of ₹21.50/litre on exports of diesel and has imposed duties on exports of ATF to ensure sufficient supply for domestic use.
Government officials have stated that fuel supplies throughout the country are sufficient at this time to meet domestic requirements; Refineries are operating at near-full capacity and there is sufficient inventory of both petrol and diesel at retail locations.