New Delhi | May 13,2026 | SKY LINK TIMES
RBI Warns Fuel Prices May Rise Due to Iran War:
Reserve Bank of India (RBI) Governor Sanjay Malhotra has warned that petrol and diesel prices in India could increase if the ongoing Middle East conflict involving Iran continues to push global crude oil prices higher. The remarks come amid growing concerns over inflation and the financial burden on public sector oil companies.
Speaking at a conference hosted by the Swiss National Bank and the International Monetary Fund in Switzerland on Tuesday, the RBI Governor said the central bank is closely monitoring the impact of rising energy prices on India’s economy.
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Rising Crude Oil Prices Trigger Inflation Concerns
Global crude oil prices have crossed the $100 per barrel mark due to tensions in West Asia. Since India imports nearly 88 per cent of its crude oil requirements, any sharp increase in international prices directly impacts domestic fuel costs.
According to the RBI Governor, the current situation is putting pressure on India’s flexible inflation-targeting framework.
“We are becoming increasingly data-dependent. The RBI is flexible in its approach and can look through temporary shocks, but if inflationary pressures become entrenched, action may be necessary,” Malhotra said during the conference.
He added that a rise in retail fuel prices could become unavoidable if the geopolitical crisis continues for a prolonged period.
RBI Maintains ‘Wait and Watch’ Policy Stance
In its April 2026 monetary policy meeting, the RBI’s Monetary Policy Committee decided unanimously to keep the repo rate unchanged at 5.25 per cent. The central bank maintained a neutral stance to support economic growth while carefully tracking inflation risks arising from global uncertainties.
The next RBI monetary policy review is scheduled for June 5, where policymakers are expected to assess the impact of global crude oil movements and inflation trends before taking a decision on interest rates.
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Oil Companies Facing Massive Losses
Meanwhile, Union Petroleum Minister Hardeep Singh Puri stated that public sector oil marketing companies are suffering huge losses as retail fuel prices have not been increased despite rising crude costs.
According to the minister, state-run oil companies are currently losing nearly Rs 1,000 crore per day. He revealed that under-recoveries have touched approximately Rs 1.98 lakh crore, while losses during the current June quarter are nearing Rs 1 lakh crore.
Puri also assured that India has adequate stocks of petrol, diesel and LPG. He said the country currently holds crude reserves sufficient for nearly 76 days of demand.
LPG Supply Increased to Avoid Disruptions
To maintain uninterrupted LPG supply, oil companies have increased domestic LPG production to around 55,000–56,000 tonnes daily, compared to about 35,000 tonnes earlier.
However, experts believe that if global crude prices remain elevated for a longer period, consumers may eventually face higher fuel costs, which could further increase transportation expenses and overall inflation across sectors.
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