Equity strategist Harsh Gupta Madhusudan said the Indian government's decision to increase petrol and diesel prices in a staggered manner is the most practical approach.
This strategy aims to shield the economy from the sudden shocks that typically accompany sharp price jumps. By spreading out the costs, the government can manage the impact on consumers and transportation, while addressing the financial viability of oil marketing companies.
Gupta said the gradual approach is necessary because of volatile global crude prices [1]. He said oil marketing companies may still require prices to rise by ₹10-15 per litre to reach break-even levels [1].
These domestic price adjustments are occurring against a backdrop of international instability. Economist Surjit Bhalla said rising petrol and diesel prices in India are part of a larger global energy crisis triggered by geopolitical tensions and war in West Asia [2].
The volatility in West Asia has created a ripple effect across energy markets, forcing nations to balance fiscal stability with public affordability. The staggered pricing model allows the market to absorb costs incrementally rather than facing a single, disruptive price spike.
Gupta said the decision remains the most practical path forward given the current global economic climate [1].
“"The government's decision to increase petrol and diesel prices in a staggered manner is the most practical approach"”
The shift toward staggered fuel pricing suggests that the Indian government is prioritizing macroeconomic stability over immediate price freezes. By allowing gradual increases, the state attempts to mitigate the risk of sudden inflation spikes while ensuring that oil marketing companies remain solvent despite the volatility of global crude markets caused by conflict in West Asia.
