Reserve Bank of India Governor Sanjay Malhotra has said India may have no choice but to raise petrol and diesel prices if the Middle East conflict drags on, as soaring crude oil costs push the country’s flexible inflation targeting framework under growing strain.
Speaking at a conference hosted by the Swiss National Bank and the International Monetary Fund in Switzerland on Tuesday, Malhotra said a retail fuel price hike is “a matter of time” if the West Asia crisis persists a move that would feed directly into transportation costs and broader inflation.
“We are being more and more data dependent. The RBI is being flexible in its approach and is ready to look through the shock if it is transitory, but if it is entrenched, we need to take action,” he said.
The RBI’s next monetary policy meeting is scheduled for June 5, when the committee will decide on key interest rates. At its April 2026 meeting, the Monetary Policy Committee unanimously held the repo rate steady at 5.25 percent, maintaining a neutral stance in a deliberate wait-and-watch approach to balance domestic growth against rising global uncertainties. Malhotra noted that excise duties have been reduced and public sector oil companies are currently absorbing the surge in global crude prices.
Oil firms bleeding ₹1,000 crore a day
Petroleum Minister Hardeep Singh Puri, separately, said petrol, diesel, and LPG stocks in the country are adequate but signalled that price increases may be unavoidable given the scale of losses mounting at state-run oil marketing companies. Those companies are currently losing close to ₹1,000 crore per day because retail fuel prices have not been revised despite crude crossing $100 per barrel in international markets.
India imports 88 percent of its crude oil requirement, making the economy acutely sensitive to global price movements. Under-recoveries have reached ₹1.98 lakh crore, with losses for the current June quarter alone standing at nearly ₹1 lakh crore.
On supply, Puri said LPG production has been ramped up to 55,000–56,000 tonnes from around 35,000 tonnes earlier to ensure uninterrupted availability. India currently holds crude stocks equivalent to approximately 76 days of demand.
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