Indian households and businesses are grappling with sharp increases in fuel costs in March 2026, with LPG cylinder prices rising by Rs 60 for domestic use and premium petrol prices jumping by up to Rs 2.35 per litre. The price hikes are directly linked to the ongoing US-Israel-Iran war, which has disrupted global energy markets and sent crude oil prices soaring above $115 per barrel.
LPG Price Hike: Rs 60 Increase for Domestic Cylinders
Effective March 7, 2026, Indian Oil Corporation (IOC), Bharat Petroleum (BPCL), and Hindustan Petroleum (HPCL) increased the price of a 14.2 kg domestic LPG cylinder by Rs 60. This marks the first price revision in nearly a year, since April 2025.
In Delhi, the price of a subsidized 14.2 kg LPG cylinder now stands at Rs 913, up from Rs 853 in February.
Other major cities saw similar increases:
- Mumbai: Rs 913
- Kolkata: Rs 944
- Chennai: Rs 930
- Bengaluru: Rs 915.50
- Hyderabad: Rs 965
- Lucknow: Rs 950.50
The increase has sparked concern among Indian families, particularly in states where LPG cylinders are already expensive due to state taxes and logistical costs.
Commercial LPG Cylinders Hit Even Harder
Restaurants, hotels, and catering businesses have been hit far harder, as the price of a 19 kg commercial LPG cylinder was raised by Rs 115 — the biggest ever single-month increase for this category. In Delhi, the commercial cylinder now costs Rs 1,883, up from Rs 1,768.50.
This is the third consecutive month of price hikes for commercial cylinders, following increases in February and early March. Industry bodies have warned that this will increase operational costs for the food and hospitality sectors, which are already under pressure from inflation.
Premium Petrol Prices Up by Rs 2.35 Per Litre
On March 20, 2026, oil marketing companies raised the price of premium-grade petrol brands like BPCL Speed, HPCL Power, and IOCL XP95 by Rs 2.09 to Rs 2.35 per litre. The hike affects high-performance variants used in premium vehicles and does not apply to regular petrol, which remains unchanged for now.
Regular petrol and diesel prices have been held stable by the government in an apparent effort to control inflation ahead of state assembly elections in Assam, West Bengal, and Tamil Nadu. However, industry sources say the freeze is not sustainable if crude prices remain elevated.
Why Are Fuel Prices Rising in India?
The sharp rise in LPG and premium petrol prices in March 2026 is a direct result of the ongoing war in the Middle East. Here are the key factors:
- Strait of Hormuz Blockade: Iran has effectively closed the Strait of Hormuz to international oil tankers, cutting off nearly 20% of global crude oil supply. This has sent Brent crude prices above $115 per barrel, up from $78 in mid-February.
- India’s LPG Import Dependency: India is the world’s second-largest LPG importer, consuming 33.15 million metric tonnes in 2025. Approximately 85-90% of India’s LPG imports come from the Middle East, making it highly vulnerable to supply disruptions from the Iran war.
- Supply Chain Disruptions: Shipping routes through the Persian Gulf and Arabian Sea have been affected by the conflict, leading to delays and increased freight costs.
- Global Energy Spike: Fuel prices have surged worldwide. According to Moneycontrol, 95 countries have experienced fuel price spikes, with some seeing increases of up to 68%.
Government Response: No Shortage, But Precautionary Demand Rising
The Indian government has assured citizens that there is no shortage of LPG supply in the country. Sujata Sharma, Joint Secretary in the Petroleum and Natural Gas Ministry, stated that no consumer has been unable to procure LPG.
However, officials acknowledged a sharp rise in LPG bookings in recent weeks, driven by precautionary purchasing amid fears of future supply disruptions. The government has urged refineries to increase domestic LPG production to reduce import dependency.
Will Regular Petrol and Diesel Prices Increase?
As of March 21, 2026, regular petrol and diesel prices remain unchanged across India. However, industry analysts warn that this freeze is politically motivated and unsustainable. Internal pricing projections suggest that the market-linked cost of petrol and diesel in Delhi is now Rs 12-15 per litre higher than the current retail price.
If the Iran war continues beyond April and crude prices remain elevated, a significant petrol and diesel price revision appears inevitable.
Impact on Indian Households and Economy
The LPG price hike of Rs 60 per cylinder adds approximately Rs 180-240 per quarter to household budgets for families using 3-4 cylinders. For low-income households relying on the Ujjwala Yojana scheme, this increase erodes the subsidy benefits and raises cost-of-living pressures.
Inflation is also being pushed higher. India’s CPI inflation for February 2026 was already at 5.8%, and the fuel price increases are expected to add another 0.3-0.5% to the index.
Conclusion
The Iran war’s impact on India’s energy security is now being felt directly at kitchen stoves and fuel pumps across the country. With LPG cylinders Rs 60 more expensive, commercial cylinders up Rs 115, and premium petrol costlier by Rs 2.35 per litre, Indian consumers are facing the economic consequences of a Middle East conflict thousands of kilometers away. Whether regular petrol and diesel prices remain frozen or rise sharply in the coming weeks will depend on how long the war lasts and whether the Strait of Hormuz can be reopened to oil tankers.