Petrol-Diesel Price: Is Govt Planning To Rise Fuel Rates Amid Iran-Israel War? Here's The Update

For days now, internet has been buzzing with the speculations of the Indian government considering a hike in petrol and diesel price due escalating tensions in West Asia.

With Iran announcing that it will close the Strait of Hormuz, the world's most key oil export route that connects the Gulf oil producers, such as Saudi Arabia, Iran, Iraq and the United Arab Emirates, with the Gulf of Oman and the Arabian Sea, the common man was worried whether he will face the brunt as any change in oil price will have direct impact on them.

It is because the rise in the oil price will have direct impact on transportation fuel costs, consumer inflation, and industrial production costs. Well, the government has no immediate plans to raise the prices of fuel in the country, ANI reported citing sources.

India currently has about 25 days of crude oil and refined petroleum reserves, the report said.

According to ANI sources, India is actively looking for alternative suppliers of crude oil, liquefied petroleum gas (LPG), and liquefied natural gas (LNG) to safeguard against possible disruptions in imports from West Asia. The region remains India's primary source of energy, with a significant share of crude oil and natural gas imports originating from countries in the Middle East.

On the other hand, Saudi Arabia emerged as a close second to Russia in February, dramatically narrowing the supply gap. According to a report by the Times of India citing data from Kpler, imports from the West Asian nation surged by 30% to over one million barrels per day (mbd) in February, up from 770,000 bpd in January.

This marks the highest level of crude imports from Saudi Arabia in nearly six years. For context, Kpler's data shows that imports from the Kingdom had largely remained steady in the range of 600,000 to 700,000 bpd over the previous couple of years.

Meanwhile, Russia retained its position as India's top supplier, though its volumes have seen a gradual decline due to pressure from the Trump's administration. Crude imports from Kremlin stood at just over 1 mbd in February, compared to 1.1 mbd in January and 1.2 mbd in December of last year.

However, this recent trend faces an immediate threat from escalating military actions in the Gulf region. Analysts warn that the situation could change drastically, as nearly 2.5 to 2.7 mbd of India's crude imports-primarily sourced from Iraq, Saudi Arabia, the UAE, and Kuwait-transit the strategically vital Strait of Hormuz. The ongoing military strikes have already begun disrupting cargo movements from West Asia, forcing the Indian refiners to actively seek alternative sources.

In response to the escalating crisis, Union Petroleum and Natural Gas Minister Hardeep Singh Puri chaired a high-level review meeting on Monday with senior ministry officials and public sector undertakings (PSUs). The meeting assessed the supply situation for crude oil, LPG, and other petroleum products. Subsequently, the Petroleum Ministry assured citizens on X that "all necessary steps will be taken to ensure availability and affordability of major petroleum products in the country."

Parallelly, the Department of Commerce convened a stakeholder consultation to evaluate the potential impact on India's export-import cargo flows. Chaired by Special Secretary Suchindra Misra and DGFT Lav Agarwal, the meeting included representatives from logistics operators, shipping lines, the RBI, and other key ministries.

Stakeholders presented detailed assessments of operational challenges, including changes in vessel routing, transit times, container availability, and rising freight and insurance costs. The Commerce Ministry emphasized the need to maintain predictability in cargo movement and ensure seamless documentation and payment processes.

The geopolitical uncertainty has already sent shockwaves through global energy markets. On Tuesday, global crude oil prices surged sharply, with Brent crude futures jumping by nearly 6% ($4.94) to $82.68 per barrel, hitting their highest level since July 2024. This marks the third consecutive session of gains, driven by the widening conflict involving the U.S., Israel, and Iran, and heightening fears of broader supply disruptions across the Middle East.

As the world's third-largest consumer of crude oil, India is highly sensitive to these price fluctuations. While the government has assured that domestic fuel prices will not be raised immediately, analysts caution that prolonged instability in West Asia could put significant pressure on India's import bill and its inflation outlook.

With inputs from agencies