Blitz Bureau
NEW DELHI: RBI Governor Sanjay Malhotra said that if the Middle East conflict continues, India may be forced to raise petrol and diesel prices due to the soaring cost of crude oil in the global market.
The RBI Governor highlighted that rising energy prices due to the Iran war are testing India’s flexible inflation targeting, necessitating potential policy intervention by the Reserve Bank. The central bank’s next monetary policy meeting is slated for June 5, when it will take a call on key interest rates, which it has left untouched to promote economic growth.
Malhotra indicated that raising retail fuel prices is a matter of time if the West Asia crisis persists, which in turn would lead to an increase in transportation costs and inflation.
In its April 2026 meeting, the RBI’s Monetary Policy Committee unanimously decided to keep the repo rate unchanged at 5.25 per cent, maintaining a neutral stance. This decision reflects a “wait and watch” strategy to balance strong domestic growth while keeping an eye on inflation amid global uncertainties.
“We are being more and more data dependent. The RBI is being flexible in its approach and is ready to look through the shock if it is transitory, but if it is entrenched, we need to take action,” Malhotra said at a conference hosted by the Swiss National Bank and the International Monetary Fund in Switzerland on May 13. He pointed out that excise duties had been reduced while the public sector oil companies were absorbing the rise in global crude prices amid the continuing Middle East conflict.
