India has kept petrol and diesel prices frozen since April 2022, even as global crude oil shot past $100 a barrel following the US-Iran conflict and the near-closure of the Strait of Hormuz. The government cut excise duties and absorbed the pain through state-run oil companies, which are now sitting on estimated under-recoveries of up to \u20b930 per litre on diesel and \u20b924 per litre on petrol. With four state assembly elections now done, government sources have said a price hike cannot be ruled out.<\/p>\n
The IMF stepped in with a clear message: India must eventually let higher crude prices pass through to consumers. Krishna Srinivasan, the IMF’s Asia Pacific director, said India had used up much of its fiscal room through excise cuts and fertiliser subsidies, and that price signals must be allowed to flow. The IMF’s logic is straightforward: when governments block price signals, consumers keep using fuel as if supply is normal, global demand stays high, and crude prices remain elevated, making the crisis worse for everyone.<\/p>\n
The Indian government has not fully agreed with this view, and the RBI’s deputy governor pushed back, pointing out that India’s debt-to-GDP ratio is on a declining path compared to most economies. The IMF is not asking governments to leave the poor without support. It specifically backs targeted cash transfers that protect households from the income shock while keeping the price signal intact, so people still have reason to use less fuel. The decision India faces is not just about pump prices but about whether to manage an energy shock through market signals or fiscal buffers, and the clock is ticking.<\/p>\n","protected":false},"excerpt":{"rendered":"
India has kept petrol and diesel prices frozen since April 2022, even as global crude oil shot past $100 a barrel following the US-Iran conflict and the near-closure of the Strait of Hormuz. The government cut excise duties and absorbed the pain through state-run oil companies, which are now sitting on estimated under-recoveries of up… Read More »Will India’s petrol and diesel prices finally go up?<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,8],"tags":[],"class_list":["post-4740","post","type-post","status-publish","format-standard","hentry","category-economy-2","category-economy-economy-2"],"_links":{"self":[{"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/posts\/4740","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/comments?post=4740"}],"version-history":[{"count":1,"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/posts\/4740\/revisions"}],"predecessor-version":[{"id":4741,"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/posts\/4740\/revisions\/4741"}],"wp:attachment":[{"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/media?parent=4740"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/categories?post=4740"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/maxiomwealth.com\/askguru\/wp-json\/wp\/v2\/tags?post=4740"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}