Seventy-two hours. Within three days, India has made four major economic policy decisions to help the country battle the energy crisis stemming from the ongoing war in West Asia.
After increasing the import duty on gold and silver, increasing milk prices, and banning sugar exports till September, the Narendra Modi government has finally announced a price hike in fuel prices on Friday (May 15), increasing the cost of petrol and diesel by Rs 3.
But is this it, or is there more to come? We take a closer look at the Modi government’s four big decisions and how they will impact the common man. Also, what’s next in the pipeline?
India hikes fuel prices
On Friday (May 15), the Centre announced a
hike in fuel prices effective immediately. The cost of petrol and diesel has been increased by Rs 3, marking the first time retail fuel prices have been hiked in four years.
With the hike, the price of petrol in Delhi stands at Rs 97.77, while in Mumbai it is Rs 106.68. In Kolkata, the cost of petrol is now Rs 108.74, while in Chennai it is Rs 103.67.
The price of diesel has also been increased by Rs 3, taking the cost of a litre in the Capital to Rs 90.67. In Mumbai, the cost of diesel has gone up to Rs 93.14; in Kolkata, it has increased to Rs 95.13, and in Chennai, diesel will now cost Rs 95.25.
The price of Compressed Natural Gas (CNG) has also been increased by Rs 2. This hike is bound to hit the public transport sector, which is heavily dependent on CNG.
Notably, the hike in fuel prices comes days after PM Modi had made an appeal to all
Indians to save fuel and foreign exchange by adopting work-from-home measures, deferring gold purchases, and refraining from international travel for a year.
This had led to panic buying amid consumers across several states, where consumers rushed to fuel stations. In multiple regions, including Delhi-NCR, Uttar Pradesh, Gujarat, Bihar, Rajasthan, and Odisha, petrol pumps reported unusually heavy crowds and long queues stretching up onto the roads.
This prompted Union Petroleum Minister Hardeep Singh Puri to declare that India has sufficient reserves and there is no reason for panic. However, he added a disclaimer. “There is no shortage of petroleum products in the country. We have adequate supplies. But Prime Minister Narendra Modi’s appeal should be seen as a wake-up call.”
Until now, the state-run oil companies were buying crude oil at a higher price, but not passing on the increase to retail consumers. In fact, they were bearing a loss of about Rs 1,600 crore daily.
The losses reportedly widened in April and May after the companies finished lower-cost fuel inventories accumulated earlier in the year.
India’s other big 3 decisions
The hike in fuel prices comes after India announced three other big economic policy decisions. It all began on May 13 when the Centre revised
import duties on gold, silver, and other precious metals, taking the total effective duty on gold imports up to 15 per cent.
This decision, as per government sources, was to discourage non-essential imports, reduce pressure on foreign exchange reserves and contain the widening trade deficit at a time when crude oil prices are rising because of the West Asia crisis.
This marked a reversal from the 2024 Budget, when import duty on gold had been reduced. Under the new structure, the government has increased the Basic Customs Duty to 10 per cent and raised the Agriculture Infrastructure and Development Cess to five per cent. Together, that pushes the overall import duty on gold to 15 per cent. The revised rates also apply to silver, platinum, precious metal coins, jewellery components, and some related imports.
But increasing the gold import duty wasn’t the only big announcement by the Centre.
On Thursday (May 14), milk giants Amul and Mother Dairy increased their prices. Amul, marketed by the Gujarat Cooperative Milk Marketing Federation (GCMMF), has increased prices by Rs one-two per litre across most variants. Amul Gold milk in the one-litre pack will now cost Rs 70, up from Rs 68, while Amul Taaza has been revised to Rs 57 from Rs 55.
Mother Dairy Buffalo Milk has been increased to Rs 80 from Rs 75. The 500 ml Buffalo Milk pack has also been revised to Rs 80 from Rs 7.
On the same day that the milk giants increased their prices, the Modi government also announced the decision to
ban exports of raw, white and refined sugar until September 30. There are three reasons that were behind this decision: El Niño, the Iran war, and depleting stocks of sugar.
What else is in the offing
While these big changes have already been implemented, it is being reported that India is looking to do more.
One of the considerations is a significant reduction in the taxes paid by foreign investors on the nation’s bonds. According to a Bloomberg report, the Reserve Bank of India recommended the move, which is being seriously considered by the Finance Ministry.
The sources speaking to Bloomberg noted that deliberations on easing the tax burden have gathered pace as authorities attempt to curb the rupee’s depreciation.
There is no confirmation if this will take happen.
As of now, India is still digesting the fuel hike. They also remain wary of the future.
With inputs from agencies
First Published:
May 15, 2026, 08:59 IST
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