RBI Governor warns of possible petrol and diesel price hike
Reserve Bank of India Governor Sanjay Malhotra on Tuesday warned that the government may eventually be forced to increase petrol and diesel prices if the ongoing Middle East crisis continues for a prolonged period and keeps global energy markets under pressure.
Speaking at a conference in Switzerland, Malhotra said the conflict in West Asia and disruptions around the Strait of Hormuz have already started impacting global oil and gas supplies, leading to higher energy prices.
He noted that India remains heavily dependent on imports for crude oil and fertilisers, making the country vulnerable to prolonged geopolitical instability in the region.
“If the crisis continues for a longer period of time, it is a matter of time before the government actually passes on some of these price increases,” the RBI Governor said.
Despite rising global crude prices since the conflict began on February 28, the government has so far avoided increasing retail prices of petrol and diesel in the domestic market.
Malhotra, however, cautioned that sustained pressure on global energy supplies could make it difficult to shield consumers indefinitely.
The RBI Governor also underlined that the Centre has so far maintained fiscal discipline and remained committed to fiscal consolidation despite growing external challenges.
Prime Minister Narendra Modi had earlier appealed to citizens to reduce fuel consumption and avoid unnecessary expenditure on imports as part of broader austerity measures aimed at conserving foreign exchange reserves.
India’s currency has also come under pressure amid the global uncertainty, with the rupee slipping below the 95-mark against the US dollar.
The ongoing turmoil in West Asia has triggered concerns over inflation, supply chain disruptions and higher import bills for countries heavily dependent on energy imports, including India.
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