US Israel Iran War: Crude Oil Prices Double Due to War: What Will Be the Impact on India? Could Petrol and Diesel Become More Expensive?
Following fresh attacks by Iran on energy installations in the Gulf nations, global market prices for crude oil and natural gas surged by up to 30%.
Since the outbreak of the war, crude oil prices for India have nearly doubled, reaching $146 per barrel. This rise could lead to an increase of Rs 10–15 in the prices of petrol and diesel in India.
India procures oil from Iraq, Saudi Arabia, Russia, and the UAE. The weighted average of the prices of these various types of oil is referred to as the 'Indian Basket.'
India imports 85% of its crude oil requirements and over 50% of its natural gas; consequently, any developments in those regions have a direct impact on our wallets and the economy.
Prices of Petrol, Diesel, and LPG May Rise
Alongside the 'Indian Basket,' the international benchmark—Brent Crude—has also surged from $73 to $114 per barrel since the onset of the war. If crude oil prices remain at this elevated level, it will become increasingly difficult for state-owned oil companies to continue selling petrol, diesel, and gas at current rates. Consequently, there is a likelihood that prices for gas, petrol, and diesel could rise by Rs 10–15 in the coming days.
For the time being, state-owned oil companies have managed to keep prices under control by compressing their profit margins or absorbing financial losses. Petroleum Minister Hardeep Singh Puri has clarified in Parliament that India's energy security remains fully secure. Nevertheless, if crude oil prices persist at these levels for another 1–2 weeks, the government may be left with no alternative but to raise prices.
Food and Essential Commodities May Also Become More Expensive
Crude oil is not merely refined into petrol and diesel; it also serves as a raw material for the production of paints, plastics, fertilizers, and pharmaceuticals. An increase in diesel prices will inevitably drive up freight and transportation costs, which, in turn, will lead to higher prices for fruits, vegetables, and food grains. All in all, the common man's budget will be disrupted.