India hikes fuel prices amid energy crisis triggered by Iran war
Al Jazeera English
India, the world's third-largest oil importer, has raised fuel prices by about 3% and announced austerity measures after the Iran war and closure of the Strait of Hormuz disrupted global energy supplies. Prime Minister Modi urged citizens to conserve fuel as a 'patriotic' duty, while opposition leaders criticized the timing of the hike after state elections ended.
India raised fuel prices by about 3% on Friday as the energy crisis from the Iran war and the closure of the Strait of Hormuz began to hammer the economy.
The government in New Delhi announced a hike of 3 rupees ($0.03) per liter to offset losses from supply shortages. Petrol rose to 97.77 rupees ($1.02) per liter, while diesel climbed to 90.67 rupees ($0.94) per liter.
India is the world's third-largest oil importer, buying about 90% of its consumption from abroad, and roughly half of its usual crude supply passes through the Strait of Hormuz. That makes it acutely vulnerable to the surging energy prices and supply disruptions from the U.S. and Israeli war on Iran.
Until Friday, New Delhi had held retail fuel prices steady, making it one of the last major economies to pass on the cost of soaring crude to consumers.
Fuel-saving as 'patriotic duty'
The price increase came days after Prime Minister Narendra Modi urged Indians to adopt voluntary belt-tightening measures, including working from home where possible, limiting foreign travel and cutting back on gold purchases.
Modi described saving fuel as a 'patriotic' act and encouraged people to use more public transport, carpool and reduce fertilizer consumption.
Opposition leaders noted that Modi's appeal came after key state election rounds ended and fuel prices had been kept flat throughout the campaign. Polling concluded this month, with Modi's BJP winning two of four states and expanding its footprint.
Manoj Kumar, a 48-year-old taxi driver in New Delhi, told the Associated Press the fuel hike would pile more pressure on the working class. 'For common people like us, even one rupee matters a lot. People work hard from morning to night just to make ends meet. The government does not see this,' he said.
India's capital became the first state in the country to roll out austerity measures on Thursday. The New Delhi government announced fuel-saving steps, including mandatory work-from-home for some government employees.
Chief Minister Rekha Gupta said the 90-day campaign aimed to reduce official fuel use and wean the city's residents onto more public transport. Staff whose jobs can be done remotely will have to work from home two days a week, while private companies were encouraged to follow suit.
India has also accelerated blending ethanol into petrol as part of its push to cut crude imports. Many gas stations across the country now sell petrol blended with 20% ethanol, and the government has proposed expanding the use of fuel containing 85% or even 100% ethanol on compatible vehicles.
Energy experts say biofuel blending can soften the blow of global energy volatility, but may lead to worse environmental problems by encroaching on food-crop land and potentially damaging older vehicle engines.
Amid the supply squeeze, India announced on Friday it had signed oil and gas deals with the United Arab Emirates, as well as a strategic defense partnership. The agreements were inked as Modi began a five-country tour that will also take him to Europe, and will 'focus on enhancing our energy security,' India's foreign ministry said.
Meanwhile, the UAE government media office announced plans to accelerate construction of a new oil pipeline to expand capacity to bypass the Strait of Hormuz, with operations expected to start in 2027.
