Fuel rates have already climbed Rs 7.5 per litre since May, with another Rs 2.5 hike possible; silver breaches Rs 2.65 lakh per kg mark.

 Indian consumers may have to brace for another round of fuel price hikes as oil marketing companies consider raising petrol and diesel rates by up to Rs 2.5 per litre in the coming days, according to a report by rating agency Crisil released on Tuesday.

Oil Companies Under Pressure

Petrol and diesel prices have already increased by approximately Rs 7.5 per litre since May 15, and state-run oil marketing companies have been gradually paring losses amid rising global crude prices. With international crude oil averaging around USD 112 per barrel during the first two months of the current financial year, significantly higher than earlier estimates, the pressure on retail margins has intensified.

Crisil noted that cumulative hikes could move closer to Rs 10 per litre in the near term if global crude prices stay elevated.

Inflation Concerns Mounting

The impact of higher fuel prices is expected to ripple through the broader economy. Road transport accounts for roughly 71 per cent of India‘s freight movement, and fuel makes up nearly 42 per cent of transport operators’ expenses. Crisil estimates that the Rs 7.5 per litre increase already adds about 36 basis points to consumer price index inflation. If fuel prices rise further to Rs 10 per litre, the total impact could approach 48 basis points.

Food items dependent on transportation networks — including dairy, fruits, vegetables, pulses, spices, tea, coffee, eggs, meat and fish — are likely to feel the heat first. Manufacturing sectors such as clothing, consumer electronics, cement, ceramics, chemicals, coal and metal-related products are also expected to see higher input costs.

ED Conducts Searches at Vedanta Offices

In a separate development, the Enforcement Directorate carried out searches at multiple premises of the Vedanta Group in Delhi, Mumbai and Udaipur as part of a probe into alleged Foreign Exchange Management Act violations. Officials familiar with the matter said the investigation is examining transactions related to brand royalty payments made by the Indian subsidiary to its UK-based parent company, Vedanta Resources.

The searches, which began on Monday and continued through Tuesday, are being conducted under the civil provisions of FEMA. The probe is reportedly looking into an instance from 2023 where Vedanta Resources refunded a portion of the brand fee to Vedanta Ltd. A spokesperson for the mining conglomerate said the company was extending full cooperation to the authorities.

South Korea Overtakes India in Market Cap

India‘s stock market ranking slipped a notch as South Korea overtook it to become the world’s sixth-largest equity market. Data compiled by Bloomberg showed that the total market capitalisation of South Korea-listed companies surged 86 per cent this year to USD 5 trillion, driven largely by chip-making giants riding the artificial intelligence wave. Meanwhile, India‘s market capitalisation declined to USD 4.8 trillion.

Despite the shift in market cap ranking, India’s economy, valued at USD 4.15 trillion, remains considerably larger than South Korea's USD 1.93 trillion GDP, according to IMF estimates.

Silver Prices Breach Rs 2.65 Lakh Per Kg

Bullion markets also saw sharp moves, with silver prices jumping Rs 2,050 per kg to reach Rs 2.65 lakh. Ten grams of 24-carat gold climbed Rs 758 to trade at Rs 1.56 lakh, according to India Bullion and Jewellers Association data.

Markets Stay Cautious

On the equity front, benchmark indices ended Tuesday with modest losses. The Sensex closed 77 points lower at 81,373.75, while the Nifty slipped 34 points to settle at 24,716.60 amid cautious sentiment.

India Holds Fuel Prices Amid Iran War, OMC Losses Surge

Despite global hikes triggered by the Iran war, India fuel prices remain unchanged, with oil firms absorbing mounting daily losses.

India has, so far, held the line on retail fuel prices even as global markets reel under the impact of the ongoing Iran war, a move that has insulated consumers but triggered mounting financial stress for state-run oil companies.

Petrol and diesel rates have remained unchanged across the country since late February 2026, when the conflict began disrupting key crude supply routes, particularly through the Strait of Hormuz. The decision stands in sharp contrast to trends seen worldwide, where governments have largely passed on rising costs to consumers.

Global prices surge

Across international markets, crude oil prices have seen sharp fluctuations over the past two months. Brent crude briefly climbed to around $126 per barrel amid supply concerns linked to shipping disruptions.

Data from global fuel trackers indicate that more than 120 countries have raised retail fuel prices since the conflict escalated. In parts of South and Southeast Asia, price increases have ranged between 30 and 50 per cent. North America has recorded hikes of roughly 30 per cent, while Europe has seen increases of about 20 per cent.

Closer home, countries such as Pakistan, Bangladesh and Sri Lanka have reported record fuel price revisions, reflecting the broader global trend.

India bucks the trend

India’s approach has been markedly different. Retail fuel prices have effectively remained at levels last revised in May 2022, offering relief to households and businesses already dealing with broader economic pressures.

Officials say the decision is aimed at shielding consumers from volatility in global energy markets. Fuel costs in India have a cascading impact on transportation, logistics and food prices, making them a politically and economically sensitive issue.

“Protecting citizens from sudden inflationary shocks remains a priority,” a government source familiar with the policy thinking said, adding that alternative measures were being used to manage the fiscal burden.

Mounting OMC losses

However, the stability has come at a steep cost. State-owned oil marketing companies — Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited — are bearing significant under-recoveries.

Initial government estimates suggested that these companies were incurring combined losses of around ₹2,400 crore per day, as they continued to sell fuel below cost. At one stage, under-recoveries were pegged at approximately ₹26 per litre on petrol and as high as ₹81.90 per litre on diesel.

While subsequent excise duty adjustments have offered some relief, industry insiders say the financial strain remains considerable.

Government’s balancing act

The Centre appears to be walking a tightrope between fiscal prudence and inflation control. Petroleum and Natural Gas Minister Hardeep Singh Puri had earlier indicated that the government was consciously absorbing part of the global price shock rather than passing it on to consumers.

According to officials, reduced excise collections and indirect support to oil firms are part of this strategy. The broader objective is to prevent a ripple effect on essential commodities, especially in rural and semi-urban markets where fuel-driven inflation tends to hit hardest.

Inflation concerns linger

Economists point out that a sudden increase in fuel prices could push up wholesale and retail inflation, complicating macroeconomic management. Diesel, in particular, plays a crucial role in transporting agricultural produce and manufactured goods.

“Any sharp revision would have a near-immediate impact on supply chains,” said an analyst tracking energy markets, noting that India’s consumption patterns make it more vulnerable to fuel-linked inflation than some developed economies.

Possibility of revision

Despite the current freeze, the government has not ruled out a future price revision. Sources indicate that if global crude prices remain elevated for an extended period, adjustments may become inevitable.

As of now, petrol in Delhi is priced at ₹94.72 per litre, while diesel stands at ₹87.62. These rates have held steady even as international benchmarks remain volatile.

For now, India fuel prices continue to reflect a policy choice prioritising consumer stability over short-term fiscal comfort. How long this balance can be sustained, however, remains an open question.

India's wholesale inflation jumped to a 10-month high of 1.81% in January 2026, up from 0.83% in December, as per the latest data from the Commerce Ministry released on February 16. This spike, the highest since March 2025's 2.05%, is largely fueled by a sharp rise in food and beverage prices, raising alarms for consumers and businesses alike.

Driven by everyday essentials turning costlier, this development comes amid global supply chain pressures and seasonal factors. With retail inflation also climbing to an 8-month high of 2.75% in January from 1.33% prior, households feel the pinch directly. Here's a breakdown of the key drivers and what it means now.

Key Drivers Behind India's Wholesale Inflation Spike

Wholesale Price Index (WPI) tracks prices at the producer level across three main components:

• Primary Articles (22.62% weightage): Inflation here soared from 0.21% to 2.21%. Food index jumped from -0.43% to 1.55%, with grains, wheat, and vegetables leading the food prices surge.
  
  

• Fuel and Power (13.15% weightage): Eased slightly to -4.01% from -2.31%, offering some relief amid volatile crude petroleum prices.
  
  

• Manufactured Products (64.23% weightage): Rose from 1.82% to 2.86%, hitting metals, chemicals, plastics, and rubber hardest.
  
  

Non-food items like oil seeds and minerals added to the pressure under primary articles.

WPI vs Retail Inflation: What's the Difference?

India measures inflation via two gauges:

• Wholesale Price Index (WPI): Focuses on trader-to-trader prices. Food holds 22.62%, manufactured goods 64.23%, fuel 13.15%.
  
  

• Consumer Price Index (CPI): Reflects consumer costs, with food at 45.86% and housing at 10.07%.
  
  

High WPI often signals future CPI rises, as producers pass costs to buyers.

Real Impact on Common People and Economy

Prolonged high India's wholesale inflation hurts productive sectors like farming and manufacturing. Daily necessities—think rice, veggies, and oils—are pricier at wholesale, trickling to retail shelves soon.

• Consumer Hit: Grocery bills up; example, food prices surge adds 1-2% to monthly spends for middle-class families.
  
  

• Business Strain: Manufacturers face higher input costs, squeezing margins.
  
  

• Government Moves: Past tactics like excise duty cuts on fuel helped, but options are limited for food-driven WPI inflation.
  
  

Experts like economist Dr. Rajesh Sharma note, "This 10-month high in WPI inflation warns of sticky inflation if monsoons falter or global commodity prices rise. RBI may hold rates steady."

Why This Matters Right Now

As India navigates post-festive demand and budget season, this WPI inflation trend tests economic resilience. With elections looming in states like Madhya Pradesh, rising costs could fuel public discontent. Track grocery prices weekly—opt for local staples to hedge.

In conclusion, January's 1.81% print underscores food vulnerability in India's wholesale inflation story. Stay informed as February data drops soon. Policymakers must act swiftly to shield growth.