A fuel-price shock begins far from the petrol pump. A conflict involving Iran put the Strait of Hormuz, one of the world’s most important energy corridors, under severe strain. Crude prices surged, shipping routes were disrupted and oil-importing economies faced a familiar question: how much of the shock would reach the consumer?
India had a particular reason to worry. It imports close to 88.5% of the crude it consumes. At the height of the crisis, the Indian crude basket approached $135 a barrel.* Yet the rise in petrol prices was nowhere near as steep as the rise in oil costs. According to figures cited by the government, international crude prices rose roughly 70-80% since February 2026, while domestic retail fuel prices rose by about 7-8%. Delhi petrol was ₹94.77 a litre in February. By July, it had risen to ₹102.12; not unchanged, but a much smaller increase than the rise in crude. The government also estimated that, at the peak of the shock, a market-determined petrol price could have reached around ₹125 a litre.
