The Reserve Bank of India’s governor, Sanjay Malhotra, has warned that India may soon see a rise in retail petrol and diesel prices if the conflict in West Asia persists, driving up global crude prices. Speaking at a conference in Switzerland, Malhotra said a prolonged disruption in the region would keep international crude on an upward trajectory, creating upward pressure on domestic fuel costs and complicating India’s inflation management. He added that if the shock is temporary it can be weathered, but a long-lasting spike would require tougher policy responses from the central bank.
Malhotra’s comments followed recent statements by Union Petroleum Minister Hardeep Singh Puri and come at a time when the RBI is closely monitoring inflation risks. The central bank kept the repo rate unchanged at 5.25 percent in April, and Malhotra said the next monetary policy decision on the policy rate will be taken at the Reserve Bank’s meeting scheduled for June 5. He flagged energy price inflation as a major risk to the inflation outlook and signaled that the RBI may need to act if upward pressure strengthens.
Despite high international crude-reported above US$100 per barrel-Petroleum Minister Puri has said India currently holds sufficient stocks, with crude reserves covering roughly 76 days of demand, and that LPG production has been increased to ensure supply continuity. For now, these buffers have meant that domestic pump prices have not yet been raised to reflect global moves.
But the carry-on costs are mounting for state-run oil marketing companies. The government’s temporary excise cuts have so far shielded consumers, forcing public-sector fuel retailers to absorb higher import costs. According to the figures cited by the minister, daily losses for these companies are about ₹1,000 crore, and cumulative losses have reached roughly ₹1.98 lakh crore. That mounting burden may leave the government with little choice but to consider increasing retail fuel prices to protect the viability of oil firms.
Economists and policymakers say higher fuel prices would raise transportation costs and feed into broader consumer inflation, complicating efforts to keep price growth under control. If crude prices remain elevated, India could face the twin challenges of protecting energy supplies and preventing a sustained rise in inflation-tasks that would shape both fiscal choices and the RBI’s monetary stance in the coming months.
Original Source: https://assam.nenow.in/the-ripple-effects-of-the-west-asian-conflict-petrol-and-diesel-prices-in-india-could-soon-see-a-surge/
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Publish Date: 2026-05-13 21:12:00
