Fuel prices across India remained steady on May 3, despite continued volatility in global crude oil markets due to tensions in West Asia and disruptions in key shipping routes. Diesel rates, in particular, showed no change across major cities.

The stability in fuel prices comes amid heightened political sensitivity ahead of the results of recently held assembly elections in West Bengal, Tamil Nadu, Assam, Kerala and Puducherry.

Diesel prices in major cities

Factors influencing diesel prices

Diesel prices in India are largely determined by global and domestic factors. The international price of crude oil remains the primary driver, as it directly impacts the base cost of fuel.

The exchange rate between the rupee and the US dollar also plays a key role, as India depends heavily on crude oil imports. A weaker rupee increases procurement costs, which can affect retail fuel prices.

Reasons for variation across cities

Differences in diesel prices across cities are mainly due to taxes imposed by central and state governments. These taxes form a significant portion of the final retail price.

In addition, transportation costs and local demand and supply conditions also influence the variation in diesel rates across different regions.