India May Hike Fuel Prices in November, Says Oxford Economics
India may increase petrol and diesel prices in November, according to Alexandra Hermann Prasad, lead economist at Oxford Economics. The move could provide a limited opportunity to raise fuel prices before campaigning intensifies for key state elections early next year. The proposed hike could be around half the cumulative 7.5% increase implemented in May in response to the Middle East conflict.
A further fuel price increase could push retail inflation to 6.2% in the October–December quarter and 6.5% in the first quarter of 2027, exceeding the Reserve Bank of India’s target range of 2–6%. Inflation reached 5.54% in September, up from 4.83% in August. Oxford Economics also expects the RBI to consider raising interest rates by 25 basis points in both December and February to manage persistent inflationary pressures.
However, if the government does not announce a fuel price hike in November, Oxford Economics could lower its inflation projections by 10–30 basis points in the coming quarters. Despite this possibility, inflation is expected to remain elevated. Meanwhile, the aviation ministry is discussing measures with airlines and oil marketing companies to keep airfares reasonable amid volatile jet fuel prices.
Pic courtesy: google/ images are subject to copyright
