Fuel Prices May Drop By Rs 2-4 Per Litre After US-Iran Peace Agreement; Check Latest Petrol, Diesel Prices

Hopes of easing in fuel prices have heightened after the US and Iran announced their decision for a peace agreement that could reopen the Strait of Hormuz. The deal is expected to be signed on June 19th in Switzerland. OMCs made a series of hikes in petrol and diesel prices due to the global energy crisis owing to the West Asia conflict. Now the de-escalation is expected to cool off petrol and diesel in India.

Will Fuel Prices Fall After US-Iran Agreement?

Explaining in detail, Dr. Manoranjan Sharma, Chief Economist, Infomerics Ratings, told GoodReturns that if the West Asian conflict de-escalates and crude oil prices retreat sustainably, Indian consumers could see some relief in petrol and diesel prices.

However, Sharma believes that meaningful reductions are unlikely unless Brent crude remains consistently below about $75-80 per barrel for several months. India imports nearly 85% of its crude oil requirements, making domestic fuel prices highly sensitive to global energy markets.

Nevertheless, he added, "oil marketing companies (OMCs) remain focused on recovering past under-recoveries and strengthening balance sheets after periods of suppressed retail prices. The government may also prefer to retain part of the gains through excise-duty adjustments to protect fiscal revenues."

Consequently, Sharma believes any immediate reduction is likely to be around Rs 2-4 per litre.

"More significant cuts would require prolonged stability in the oil market, lower geopolitical risk premiums, and confidence that crude prices will remain subdued rather than merely temporarily depressed," added Sharma.

Petrol Prices In India:

Petrol prices were hiked by four times in May alone. The last hike in petrol prices was in the range of Rs 2.46 to Rs 2.95 per litre with effect from May 25, 2026. Prior to this, petrol prices were raised by Rs 0.87 to Rs 1.46 on May 23, and earlier were hiked by Rs 0.82 to Rs 1.71 per litre. OMCs began hiking petrol prices for the first time since April 2022, by Rs 2.82 to Rs 3.39 per litre on May 15, 2026. The reason is the shocks of US-Iran war.

OMCs are likely to incur Rs 74,000 crore to Rs 84,000 crore in losses on petrol and diesel sales in June 2026, as per reports. While in the month of May, the Oil Ministry pointed out that OMCs were already bearing Rs 1,000 crore loss per day for keeping petrol and diesel prices unchanged before the May 15, 2026 hike. The estimated OMC under-recoveries during the April-June 2026 quarter itself are expected to surge to Rs 2,00,000 crores and losses are likely to be around Rs 1,00,000 crores, as per the ministry.

Check Latest Petrol Prices In India:

City	Petrol Price (₹/Litre)	Price Change
New Delhi	₹102.12	0.00
Kolkata	₹113.47	0.00
Mumbai	₹111.18	0.00
Chennai	₹107.87	▲ ₹0.12
Gurgaon	₹102.80	▼ ₹0.04
Noida	₹102.12	0.00
Bangalore	₹110.89	▼ ₹0.08
Bhubaneswar	₹108.89	▼ ₹0.17
Chandigarh	₹101.54	0.00
Hyderabad	₹115.69	▼ ₹0.04
Jaipur	₹113.15	▲ ₹0.05
Lucknow	₹101.86	▼ ₹0.03
Patna	₹114.24	▲ ₹0.69
Thiruvananthapuram	₹115.49	0.00

Diesel Prices In India:

Just like petrol, diesel prices also faced heavy hikes due to the West Asia war. The latest round of hike was by Rs 2.57 to Rs 3.03 per litre on May 25, followed by hike of Rs 0.87 to Rs 1.45 per litre on May 23. Diesel rates were also hiked by Rs 0.84 to Rs 1.22 per litre on May 19 and the first hike began on May 15 to the tune of Rs 2.74 to Rs 3.26 per litre since US-Iran conflict.

Check Latest Diesel Prices In India:

City	Diesel Price (₹/Litre)	Price Change
New Delhi	₹95.20	0.00
Kolkata	₹99.82	0.00
Mumbai	₹97.83	0.00
Chennai	₹99.66	▲ ₹0.10
Gurgaon	₹95.47	▼ ₹0.04
Noida	₹95.56	0.00
Bangalore	₹98.80	▼ ₹0.07
Bhubaneswar	₹100.60	▼ ₹0.17
Chandigarh	₹89.47	0.00
Hyderabad	₹103.82	0.00
Jaipur	₹98.22	▲ ₹0.05
Lucknow	₹95.36	0.00
Patna	₹100.20	▲ ₹0.66
Thiruvananthapuram	₹104.42	▲ ₹0.11

US-Iran New Peace Agreement:

US President Donald Trump has fully authorized the toll free opening of the Strait of Hormuz and immediate removal of US Naval blockade. He said, "Ships of the World, start your engines. Let the oil flow!"

Meanwhile, US Vice President, JD Vance shared the details of the agreement. He said, Strait of Hormuz will be reopened and hold a commitment that Iran will never develop or procure a nuclear weapon. The Islamic regime will undergo a verification process to ensure the deal is followed, upon which US will lift sanctions on Tehran.

Vance also said that USA is committed to destroying and disposing of all of Iran's stockpile of highly enriched material.

However, the two countries have called this deal tentative.