The price of India’s petrol, diesel and LPG cylinder could surge over the next five to seven days as tensions in West Asia escalate and spill over onto global crude oil markets, sources from the government said.
Uncertainty has spread due to geopolitical tensions in the Middle East and a gradual uptick in global energy markets, notably elevated crude oil prices. The oil marketing companies and officials monitoring the situation said they are evaluating the effect of higher oil prices globally and that they need to review domestic fuel prices soon.
India, which imports most of its crude oil requirements, is extremely sensitive to world oil price levels. Further instability in the oil-producing areas, especially in West Asia, could have a negative impact on the country’s fuel import costs and domestic pricing structures.
And so with oil prices rising, customers may expect to see petrol and diesel prices also go up, as well as LPG cylinders domestically, both at elevated prices in the near term. Ongoing global market developments and consultations with the government will determine whether the revision will occur in the next week.
Oil prices have fluctuated sharply worldwide in recent weeks as military and diplomatic tensions have risen across the Middle East. Worries that the oil economy, including near the Strait of Hormuz, might be disrupted with supplies also added pressure to foreign crude benchmarks.
Energy analysts also say the impacts of that wouldn’t just be because of fuel prices. Extended rises in crude oil’s price could also impact transport costs, commodity prices, inflation and national households’ budgets. Particularly, the hikes in LPG prices are expected to hit middle-class and poor households harder.
Oil marketing companies can also update the price of fuel for a range of reasons, such as international oil prices, exchange rate fluctuations, costs of transportation, and taxes. Governments must provide occasional interventions meant to insulate consumers from an abrupt supply spike, but officials say the net outcome is mixed. It comes as officials are already putting stress on fears of inflation and examining it, they add.
Economists say further instability in West Asia would complicate economic planning and raise costs for those depending on imported goods, such as India. Consumers are now waiting for the government to increase the price of petrol, diesel or LPG cylinders in their eyes, in many metro areas.
Any increase in fuel prices may hit the cost of living hard: public transport, food delivery, logistics, and basic needs. Before price decisions are made, officials will probably spend the days discussing international matters. Unless these adjustments are made, however, the potential for a higher fuel and LPG price continues to hang in the air as global energy markets are uncertain.
