- The government may raise petrol and diesel prices if the Middle East crisis persists longer
- RBI Governor Sanjay Malhotra noted government’s fiscal prudence and consolidation efforts
- Energy supply disruptions from the Middle East conflict have pushed global prices higher
The government might have to hike petrol and diesel prices if the Middle East crisis continues for a longer period, according to Reserve Bank Governor Sanjay Malhotra.
Speaking at a conference in Switzerland on Tuesday, Malhotra highlighted that the government has been rather fiscally prudent and on the path of fiscal consolidation.
The Middle East conflict and the blockade of the Strait of Hormuz have disrupted oil and gas supplies, pushing energy prices higher.
India is highly dependent on imports of energy and fertilisers, Malhotra said, adding that the current disruptions are beginning to impact India.
Referring to the crisis, the Reserve Bank of India (RBI) governor said if it continues for a longer period of time, then it is a "matter of time that the government will actually pass on some of these price increases".
The government has not increased the retail prices of petrol and diesel despite the Middle East conflict that started on February 28.
Prime Minister Narendra Modi has called for reducing the use of fuel and consumption of edible oil, among other austerity measures, to save foreign exchange.
The rupee has witnessed a steep depreciation and is currently trading below the 95 mark against the US dollar.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
