Sanjay Malhotra, Governor of the Reserve Bank of India, has warned that petrol and diesel prices in India may increase if tensions in West Asia continue and crude oil supplies are disrupted due to the Iran war. The RBI Governor made these remarks while speaking at a conference organised by the Swiss National Bank and the International Monetary Fund in Switzerland.
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Sanjay Malhotra stated that the government may pass the burden on to consumers if crude oil supply disruptions continue. He also said that rising oil prices could affect the Indian economy and increase inflation.
RBI Governor on Fuel Price Hike
RBI Governor Sanjay Malhotra said that disruptions in crude oil supplies due to the Iran war may lead to a rise in petrol and diesel prices in India.
He explained that the government has already reduced excise duties while oil companies are bearing losses to control fuel prices. However, he questioned how long such a system could continue if global crude oil prices rise further.
According to the governor, any sharp increase in oil prices would directly impact transportation costs and eventually lead to inflation across the country.
West Asia Tensions and Iran War Impact
The RBI Governor linked the possible fuel price increase to the ongoing tensions in West Asia and concerns over crude oil supplies.
He said disruptions in oil transportation and supply chains because of the Iran war could place additional pressure on the Indian economy.
Market observers have already been speculating about a possible increase in fuel prices for some time.
Narendra Modi Urges Public to Reduce Petrol and Diesel Usage
Narendra Modi has urged people across the country to reduce the use of petrol and diesel and make maximum use of public transport.
He also called for postponing gold purchases for one year.
The Centre recently increased customs duty on gold from 6 percent to 15 percent. Following the duty hike, gold prices witnessed a sharp rise in markets.
Rising Oil Prices May Increase Inflation
The RBI Governor said that rising crude oil prices could impact the country’s economy significantly.
Higher fuel prices would increase the transportation cost of goods, which could eventually push inflation upward.
He added that the government and oil companies are currently trying to manage prices, but future developments in West Asia remain a concern.
RBI Governor Sanjay Malhotra warned in Switzerland that petrol and diesel prices in India may rise if West Asia tensions continue and crude oil supplies are disrupted due to the Iran war. He said higher oil prices could increase transportation costs and inflation, while Prime Minister Narendra Modi urged citizens to reduce petrol and diesel usage and use public transport more frequently.
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