Hints by govt, caution by experts: Why this fuel price hike might just be the beginning

DAys of expectation nigh a possible strike of the w Asia run afoul on domestic fuel prices ended on Friday as oil companies increased by ₹3 each rates of petrol and diesel in India, a move that the government hinted was coming amid severely impacted global energy supplies.The February 28 US-Israeli strikes on Iran sparked a retaliation by the latter that led to a full-scale war which has rattled the entire oil-rich Gulf and regions beyond along with virtually shutting off the Strait of Hormuz — a key waterway through which a fifth of world's energy requirements flow. Iran was able to close the strait due to its geographical advantage.Global energy prices have been bearing the brunt of halt on movement of vessels carrying oil and gas on the Strait of Hormuz, with India also now giving in to the pressure and seeing an increase in fuel rates — which experts believe might not be the only hike.Hints dropped by govtPetroleum minister Hardeep Singh Puri on Tuesday hinted about the price hike. At some stage the government has to take a view on raising prices of petroleum products such as petrol and diesel, he said at a CII event in Delhi. His assertion came after Prime Minister Narendra Modi's Sunday call to people to conserve both energy and foreign exchange. He reiterated the same on Monday. Track petrol, diesel prices live herePM Modi had on Sunday advised citizens to adopt a clutch of measures, including car pooling, using public transport, working from home, buying less gold and limiting foreign travel among other measures.A shareable image titled “Modi 7 Appeals” with key points has been circulating through government and aligned social media handles. Framing the measures as a patriotic duty amid the ongoing US-Iran conflict in West Asia, PM Modi had said rising crude oil prices and disruptions to global supply chains were placing severe pressure on India’s foreign exchange reserves.Just the beginning?Some believe that the fuel price rise on Friday might be first of the many more such hikes or measures the government may have on the cards in a phased manner to cater to the pressure on global energy supplies, so that the common public is not met with a sudden massive jolt.Banker and founder of Kotak Mahindra Bank, Uday Kotak, on Tuesday said India must prepare itself for prolonged global uncertainty and avoid "living beyond its means"Interacting with Industry leaders at the CII Annual Summit, Kotak said the Prime Minister's remarks reflected a larger strategic concern around India's economic resilience amid geopolitical instability and rising energy risks.Referring to the ongoing crisis in West Asia, Kotak described the situation as "a much more bigger, much more complex problem than it sounds," while underlining the need for the country to prepare for external shocks.Arvind Kumar, Director (Refineries), Indian Oil Corporation Limited (IOCL), said on Friday that amid global pressures, the fuel price hike “is very small”."It's a very small rise, and you know a lot of pressure is there. But I can tell you that Indian Oils Group companies, ten refineries are working round the clock and more than 100 per cent capacity so that there will be no crisis, no dry out at any of our retail outlets....let us come together to save fuel and in this emergency time and this critical time," news agency ANI quoted Kumar as saying.While the government has maintained it has been trying to take every step to minimize the direct impact of the global turmoil on the people of India, policymakers and industry leaders have been warning of prolonged uncertainty.PM's recent push for adopting fuel-saving measures, Opposition's claim of a phased hike in prices coming up and caution by experts signal a forewarning of sorts for citizens to brace for further moves aimed at reducing consumption and strengthening economic resilience in the face of an increasingly unstable international environment.