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On April 1, India’s fuel market had a moment that confused almost everyone. Jet fuel prices in Delhi briefly crossed ₹2 lakh per kilolitre, the highest ever, before being cut almost in half within hours. At the same time, premium petrol rose to ₹160 per litre, commercial LPG crossed ₹2,000, and yet regular petrol and diesel prices barely moved.
How can some fuel prices spike sharply while others stay stable? But once you look closely, this is actually a clear example of how India manages a global oil shock in real time.
The trigger sits far away from India. The ongoing conflict involving Iran, the US, and Israel has disrupted global oil supply chains, especially around the Strait of Hormuz. This narrow stretch of water handles nearly one-fifth of the world’s oil trade. Even a partial disruption here pushes crude prices higher. By late March 2026, global oil prices had already crossed $100 per barrel.
For a country like India, this matters immediately. India imports over 85% of its crude oil. So when global prices rise, the cost pressure flows straight into the domestic system. But instead of passing everything on equally, India distributes the impact differently across sectors.
Take aviation turbine fuel. Unlike petrol and diesel, ATF is a deregulated product. Its pricing closely follows global benchmarks. So when crude prices surged, ATF in Delhi was initially revised from about ₹96,638 to ₹2,07,341 per kilolitre. That’s more than a 100% increase. Since fuel makes up nearly 30 to 40% of an airline’s operating cost, such a jump would have immediately pushed airfares higher and possibly forced airlines to cut routes.
But within hours, the government stepped in. The price for domestic airlines was revised to around ₹1,04,927 per kilolitre, translating to roughly an 8.5% increase instead of a full shock. This partial and staggered approach ensured that domestic air travel remained stable in the short term.
However, this protection is not universal. International flights are still exposed to the full global price increase. Airlines operating overseas routes are facing much higher fuel costs, which could eventually reflect in ticket prices or fuel surcharges.
Now compare this with petrol and diesel. These fuels are politically sensitive and directly impact inflation. Instead of allowing prices to rise, the government cut excise duty by ₹10 per litre on March 27. This move helped keep retail pump prices relatively stable, even though underlying costs were increasing.
But stability at the pump doesn’t mean the cost disappears. It simply shifts elsewhere in the system.
That shift is already visible in other segments. Premium fuels like XP100 petrol, which cater to high-performance vehicles, have seen prices rise from ₹149 to ₹160 per litre. These fuels are less regulated and therefore reflect global trends more quickly.
Commercial LPG is another example. A 19-kg cylinder in Delhi now costs ₹2,078.50, up more than ₹300 since early March. This fuel is widely used by restaurants, hotels, and small businesses. Which means the impact is likely to show up indirectly through higher food prices, catering costs, and service charges.
So what India is doing right now is essentially deciding who absorbs the shock.
Regular consumers using petrol and diesel are being protected, at least for now. Domestic airline passengers are partially shielded. But businesses, premium consumers, and international travellers are already bearing a larger share of the cost.
Moreover, oil marketing companies are caught in the middle. If they cannot pass on the full increase in fuel costs, they face under-recoveries, which means selling fuel below cost in certain segments. Over time, these losses need to be compensated, either through future price increases or government support.
What makes this situation more complex is not just the price rise, but the volatility. Jet fuel prices doubled and then fell within hours. Crude oil surged past $100 and then showed signs of cooling. This kind of fluctuation makes it difficult for airlines, logistics companies, and policymakers to plan ahead.
And this is happening at a time when India is the world’s third-largest oil consumer. Any global disruption gets amplified quickly across the economy.
Going forward, much depends on how the geopolitical situation evolves. If tensions ease, fuel prices may stabilize and some of these pressures could reduce. But if supply disruptions continue, India may have to keep balancing this approach of protecting consumers while absorbing costs elsewhere.
Because in India’s fuel economy, the price you see is only part of the story. The real adjustments are happening behind the scenes, across sectors, companies, and policy decisions.
