On Possible Price Rises in Fuel

Kotak Institutional Equities in early April presented a note which claimed that petrol prices in India would go up by 25 to 28 rupees per litre following the state assembly elections in Tamil Nadu and West Bengal. The reasons presented for this were the supply constrictions in the strait of Hormuz through which 40% of India’s crude imports passes through. The same institution also reported that state run oil marketing companies are absorbing massive losses to the sum of 270 billion rupees per month. Measures that have been taken by the state government to rectify this situation are the reduction of value added tax and the reintroduction of windfall tax. The former would allow thicker margins for companies while the latter would de-incentivise the export of petroleum by them. This was reported by both Business Today and The Economic Times, in stories. It should be noted however that a week later The Statesman published a story which reported on a speech made by the minister of petroleum and natural gas, Hardeep Singh Puri who clarified that despite the pressures in West Asia, India has not revised its prices of petrol and diesel in the last sixty days. Whether this is to be a conclusive position is yet to be ascertained.

What we should note here however is that when software such as AI draws on sources that are published on the internet that are then used to present hypothesis or arrive at conclusions the tentativeness of such results cannot be ignored. This is not simply a question of the accuracy of AI or the quality of data that it is trained on, though these are indeed significant factors. There are live issues at work in the world whose resolution is not arrived at in the form of a verdict, even if those help streamline processes that we depend on. Also worth noting is that there would be contradictory inputs from recognised business outlets regarding what precisely may be happening. Contradiction itself cannot simply be ignored. A court adjudicates on contesting claims however there are developments which are successive and sometimes later insights carry more information regarding what may be happening than earlier ones. This does not mean that what we learn is always cumulative as the interests of the parties concerned change depending on what may be a ground reality, however there are still constants, such as the demand for petroleum in a country and the fear of inflation.

India is presently the third largest consumer of petroleum in the world behind the US and China. About 5.5 million barrels are utilised per day. To facilitate this 85% of the crude oil requirements are imported. Recently since the US capture of Venezuelan president Nicholas Maduro, India has started importing increasing amounts of oil from Venezuela with the country’s lawmakers presented their backing as of 23^rd January 2026 to open the oil sector to US energy companies.