RBI Governor Sanjay Malhotra has issued a warning that petrol and diesel prices in India may increase if the ongoing crisis in the Middle East continues for an extended period. Speaking at an event in Switzerland, he highlighted disruptions in the Strait of Hormuz and rising global oil costs as key factors. India's heavy reliance on imported energy and fertilisers is already showing signs of economic strain.
Current Fuel Prices Unchanged
For now, fuel prices in India remain unchanged. However, Malhotra indicated that future price hikes may become necessary if the situation does not improve. The rupee has also weakened, falling below 95 against the US dollar amid sustained global economic pressure.
Impact on Indian Economy
The governor emphasized that India's dependence on imported energy makes it vulnerable to global price shocks. The Middle East crisis has disrupted supply chains, particularly through the Strait of Hormuz, a critical chokepoint for oil shipments. Rising global oil costs are already affecting the economy, and further increases could lead to higher inflation and trade deficits.
Malhotra's remarks come as geopolitical tensions in the Middle East show no signs of abating. The situation is being closely monitored by policymakers, who are considering measures to mitigate the impact on consumers and the broader economy.
