New Delhi: The Central Government has hinted at a possible increase in fuel prices as crude oil rates continue to soar due to the escalating conflict in West Asia. In its latest monthly economic review, the Union Finance Ministry said that the rising energy costs may have to be passed on to consumers, calling the move “inevitable.”
The ministry noted that several countries have already shifted the burden of higher fuel prices to the public, while others are yet to follow. However, it warned that during periods of supply disruption, reducing consumption becomes essential to avoid paying even higher costs for energy imports.
The report also cautioned that efforts to boost short-term economic growth should not come at the expense of long-term stability. According to the ministry, the global energy crisis may continue longer than expected as restoring production and shipping operations will take considerable time.
Criticising overly optimistic international forecasts, the report said many agencies failed to account for the time needed to normalise global oil supply chains. As a result, energy prices are likely to remain high in the coming months.
Crude oil prices averaged 113 dollars per barrel in March and remained close to 115 dollars per barrel in April, the report stated.
Meanwhile, oil marketing companies are reportedly suffering losses of around ₹14 per litre on petrol and ₹18 per litre on diesel. The Centre is also expected to bear an estimated ₹80,000 crore LPG subsidy burden during the current financial year.
The Finance Ministry further suggested that the crisis should be used as an opportunity to introduce major reforms in the energy sector, including expanding India’s strategic petroleum reserves.
