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India petrol, diesel price hike triggers inflation fears, 2.5–3% freight rise
Transporters will pass on the burden to customers; economists and analysts also see a long-term impact of the increase on the price of basic commodities and products
- PUBLISHED: Sun 17 May 2026, 3:17 PM
The hike in petrol and diesel prices in India on Friday by up to Rs3 a litre is likely to have a long-lasting impact on inflation in the country, according to economists and analysts.
Diesel-fuelled trucks deliver vegetables, fruits, groceries, and other daily essentials to millions of consumers across the country, and transporters warn that the rising cost of diesel will force them to jack up prices sharply over the coming weeks.
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The growing number of delivery platforms that cater to the needs of mostly urban consumers will also face the pinch, and transporting the goods from warehouses on the outskirts of cities to the homes of consumers will become more expensive.
However, the impact on home deliveries will be negligible as most of the goods are delivered on two-wheelers at are increasingly battery-operated and do not depend on petrol or diesel.
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Several operators have increased the rates indirectly by adding Rs10 or a little bit more as handling charges or miscellaneous expenses.
Surge pricing also varies depending on peak traffic and is a handy tool to jack up rates for many of the operators. Cab operators, including Uber and Ola and also private taxi and autorickshaw riders, demand higher rates and consumers end up paying hefty sums because of the petrol/diesel hikes.
Transporters will pass on the burden to customers, Ashok Goyal, president, All-India Transporters Welfare Association (AITWA), told reporters. “We expect freight rates across sectors to increase by 2.5–3% immediately,” he said.
Economists and analysts also see a long-term impact of the increase on the price of a host of commodities and products. Radhika Rao, senior economist, DBS Bank, told the media that it would add to headline inflation, besides having second-round inflation impact.
Political leaders have been quick to criticise the government’s move. Said Congress leader Rahul Gandhi: "Modi government's mistake, public will pay the price. The Rs3 shock has already arrived. The rest of the recovery will be done in instalments.” Karnataka deputy chief minister D.K. Shivakumar said the “price rise is Modi’s contribution,” which is placing a heavy burden on ordinary folk.
