India Raises Fuel Prices After Iran War Disrupts Oil Markets
India’s state-run fuel retailers have increased petrol and diesel prices by 3 rupees per litre, marking the first retail fuel price hike in four years. The move comes as global crude oil prices surged following disruptions in the Strait of Hormuz caused by the ongoing Iran conflict. In Delhi, petrol prices rose to 97.77 rupees per litre, while diesel climbed to 90.67 rupees. The hike is aimed at reducing mounting losses faced by Indian Oil, BPCL, and HPCL due to expensive crude imports.
Despite the increase, analysts say the revised prices are still insufficient to fully offset losses incurred by fuel retailers. Economists estimate the direct impact on India’s consumer inflation at around 15 basis points, though indirect effects on transportation and goods prices may be larger. Shares of major fuel retailers declined after the announcement, reflecting concerns that additional price hikes may still be needed if global oil prices remain elevated.
The Indian government has also introduced fuel conservation and austerity measures to control rising import bills and pressure on foreign exchange reserves. Prime Minister Narendra Modi has encouraged work-from-home policies, reduced travel, and limits on physical meetings. Analysts expect these steps, along with higher fuel prices, to slow growth in petrol and diesel demand across the country in the coming months.
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