Government asks oil companies to absorb global shock as Middle East tensions push crude above $110 a barrel
New Delhi, Mar 09 As global crude oil prices surge amid rising tensions in the Middle East, Indian consumers are watching fuel prices closely. For now, however, petrol and diesel prices across the country are expected to remain unchanged, offering some relief to households and transport operators already grappling with high living costs.
Government sources indicated that state-run oil marketing companies (OMCs) have been asked to absorb the immediate impact of the global price spike rather than pass it on to consumers. This means that while international oil markets are volatile, fuel prices at Indian pumps are likely to stay stable in the short term.
For millions of Indians—from daily commuters and taxi drivers to farmers and small businesses—fuel prices directly affect household budgets and operating costs. A sudden increase at the pump often triggers a ripple effect across transportation, food prices, and essential goods.
The global oil rally has been sharp. Both West Texas Intermediate and Brent crude climbed nearly 27–28 per cent to about $116 per barrel, the first time since 2022 that the two benchmarks have crossed the $100 mark. The surge came as tensions escalated in the Middle East, raising fears of supply disruptions along the strategically important Strait of Hormuz, a key maritime route through which a significant portion of the world’s oil shipments passes.
Despite the international spike, retail fuel prices across India have remained unchanged so far. While domestic fuel rates are generally linked to global crude movements, the government has occasionally asked oil companies to absorb price shocks during periods of extreme volatility to shield consumers.
Officials say India is better positioned to manage the current situation because of improved energy stocks and diversification of crude imports. According to sources, the share of India’s crude imports coming from sources outside the Strait of Hormuz has increased from around 60 per cent earlier to nearly 70 per cent now.
This diversification strategy has helped reduce dependence on vulnerable shipping routes and cushion the impact of geopolitical disruptions.
There are also early signs that supply flows are stabilising. Sources indicated that the first cargo shipments have already started moving through the strategic corridor, suggesting that energy supply chains are gradually adjusting to the evolving situation.
However, global energy leaders remain cautious. Saad al-Kaabi, Qatar’s energy minister, warned that if the conflict in the region continues even for a few days, Gulf exporters could declare force majeure and halt deliveries. Such a scenario could push oil prices as high as $150 per barrel and natural gas prices to $40 per MMBtu within weeks.
Meanwhile, Donald Trump, President of the United States, defended the recent spike in oil prices, describing it as a temporary cost associated with confronting Iran’s nuclear threat and ensuring long-term global security.
For Indian consumers, the coming weeks will be crucial. While the government’s current approach may shield them from immediate price hikes, prolonged geopolitical tensions could eventually test the ability of oil companies to keep pump prices steady.
