Economist Surjit Bhalla said India may need to increase petrol and diesel prices by another 20% to 25% [1].
These potential increases come as India struggles to balance domestic economic stability with a volatile global energy market. Because India imports a significant portion of its crude oil, geopolitical instability in West Asia directly impacts the cost of transport and consumer goods across the country.
In an interview with NDTV, Bhalla said the current price pressures are part of a larger global energy crisis driven by war and geopolitical tensions in West Asia [1]. He said the global market has pushed crude oil prices to over $120 per barrel [4].
"Fuel prices may still need to rise further, potentially by 20‑25%," Bhalla said [1].
While Bhalla warns of steeper future climbs, the Indian government's most recent price adjustments have been more conservative. Recent data indicates that the latest fuel price hike was under 4.5% [2]. Some reports specify that this increase amounted to three rupees per litre [3].
This disparity between current government action and economic projections highlights a tension between fiscal necessity and public affordability. The government has attempted to keep price hikes lower than those of neighboring countries to mitigate the impact on the economy [2]. However, the underlying pressure from the global oil market remains a persistent threat to this strategy.
Industry groups, including truckers, have previously warned that deepening oil crises could lead to supply disruptions and further rising costs [2]. The combination of high crude prices and the need for tax adjustments continues to place the Indian economy in a precarious position as it navigates the instability in the Middle East.
“Fuel prices may still need to rise further, potentially by 20‑25%.”
The gap between the government's modest price adjustments and Bhalla's projections suggests that India may be absorbing a significant portion of the global energy cost to prevent social unrest and inflation. If crude prices remain above $120 per barrel, the government may eventually be forced to implement the steeper hikes Bhalla predicts to avoid unsustainable fiscal deficits.
