Global oil prices have jumped sharply after fresh military strikes by the United States and Israel on Iran, pushing crude close to the $80-per-barrel mark and reigniting worries over inflation and fuel costs.
However, despite the surge in international prices, Indian consumers are unlikely to see an immediate hike in petrol and diesel rates.
Brent crude, the global benchmark, opened at $77.82 per barrel on Tuesday after briefly nearing $80 on Monday. US crude futures also rose 8.6% to $72.79 on Monday, up from around $67 on Friday. The spike follows escalating tensions in West Asia and fears of potential supply disruptions.
2 March 2026
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For India, the stakes are high. The country imports nearly 88% of its crude oil requirement, refining it into fuels such as petrol and diesel. When global oil prices rise, India’s import bill increases, which can put pressure on inflation and government finances.
No Immediate Fuel Price Hike
According to a PTI report, retail petrol and diesel prices in India are not expected to be revised upward immediately, despite the recent jump in crude prices.
The government is said to be following a calibrated pricing strategy. This approach allows state-run oil marketing companies to improve their margins when international prices are low, while shielding consumers when global rates spike.
Petrol and diesel prices have remained unchanged since April 2022. During this period, public sector oil companies such as Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation have absorbed losses during periods of high crude prices and gained when prices softened.
As a result, domestic pump prices have stayed steady even when global fuel prices rose. Similarly, when international crude prices declined, Indian consumers did not see a corresponding reduction at the pump.
The report added that the government intends to continue protecting consumers under this framework unless crude prices witness an exceptionally sharp surge. With assembly elections due in states such as West Bengal, Tamil Nadu and Assam, policymakers are keen to avoid any move that could trigger public backlash.
Amid rising hostilities in West Asia, Oil Minister Hardeep Singh Puri reviewed the crude oil, LPG and petroleum products situation in a meeting with senior ministry officials and executives from public sector oil companies.
A key concern is the Strait of Hormuz, a narrow but critical sea route through which much of India’s oil and gas imports pass. Multiple reports have suggested that the strait has been closed following the recent strikes, though there is no official confirmation yet.
The Strait of Hormuz is a crucial global energy corridor. Nearly one-third of the world’s seaborne crude oil exports and about 20% of liquefied natural gas cargoes pass through this channel. Any prolonged disruption could sharply raise global energy prices.
Markets Watch Energy Risk
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said uncertainty around the West Asia conflict will weigh on markets in the near term.
“The major risk from the market perspective is the energy risk arising from the surge in crude. Indications are that a sharp spike in crude by, say 20%, is likely only if the Hormuz Strait is closed, obstructing oil transport through the strait. There is no official confirmation of this yet. If Brent crude remains around $76, equity markets may remain weak but are unlikely to witness big crash," he said.
