India’s state‑run oil firms lifted petrol and diesel prices by just over three per cent on Friday, reflecting mounting pressure on the economy from disruptions to global energy supplies linked to the ongoing Iran‑Israel conflict.
The hike, the first increase in automobile fuel costs since the war began in February, sees Delhi’s retail petrol price rise to 97.77 rupees per litre from 94.77 rupees, while diesel moves to 90.67 rupees from 87.67 rupees, according to data from Indian Oil Corporation. Prices elsewhere in the country will vary according to state‑level taxes.
India, the world’s third‑largest oil importer, traditionally sources roughly half of its crude through the Strait of Hormuz. The near‑total closure of the waterway by Iran has constrained shipments, pushing up global crude prices. Indian oil companies have reported losses as a result of the higher input costs.
The fuel price increase follows a recent rise in liquefied petroleum gas (LPG) tariffs, a staple cooking fuel for millions of Indian households. Authorities are simultaneously tightening austerity measures to curb fuel consumption and preserve foreign‑exchange reserves. Delhi’s chief minister announced that government offices will adopt a two‑day‑per‑week work‑from‑home schedule for eligible staff and urged residents to reduce private vehicle use. Prime Minister Narendra Modi has reiterated that curbing fuel demand is essential to saving foreign currency spent on imports.
To offset the shortfall in Middle‑Eastern supplies, India has stepped up imports of Russian crude, benefitting from a temporary U.S. waiver on sanctions. The waiver is due to expire on Saturday, prompting Indian Foreign Minister Subrahmanyam Jaishankar to condemn “unilateral coercive measures” that, in his view, disproportionately affect developing nations. Speaking at a BRICS foreign‑ministers’ meeting alongside Iran’s Abbas Araghchi and Russia’s Sergey Lavrov, Jaishankar warned that such actions cannot replace diplomatic dialogue.
The fuel price adjustment underscores the broader ramifications of the Iran‑Israel war for energy‑dependent economies beyond the Middle East. With the Strait of Hormuz remaining largely blocked and sanctions on Russian oil persisting, India’s import strategy and domestic consumption policies are likely to stay under scrutiny. Observers will watch how the Indian government balances the twin imperatives of energy security and economic stability in the weeks ahead.
