Lok Sabha Question No. 233 (STARRED), answered on 2026-03-09
Subject: Impact of Rising Global Crude Oil Prices
Ministry: FINANCE
Asked by: Shri Zia Ur Rehman

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA STARRED QUESTION NO. *233

TO BE ANSWERED ON 09.03.2026/ Phalguna 18, 1947 (Saka)

## IMPACT OF RISING GLOBAL CRUDE OIL PRICES

## *233. SHRI ZIA UR REHMAN:

Will the Minister of FINANCE be pleased to state:

- (a) whether  the  Government  has  reviewed  the  impact  of  rising  global  crude  oil  prices  on inflation in the country and if so, the details thereof,
- (b) the  details  of  corrective  steps  being  taken  by  the  Government  to  manage  inflationary pressure, and
- (c) whether  any  fiscal  measures  are  proposed  by  the  Government  to  provide  relief  to common consumers and if so, the details thereof?

## ANSWER

THE FINANCE MINISTER (SMT. NIRMALA SITHARAMAN)

- (a) to (c): A statement is laid on the Table of the House.

## STATEMENT  REFERRED  TO  IN  REPLY  TO  THE  LOK  SABHA  STARRED QUESTION NO.233 RAISED BY SHRI ZIA UR REHMAN FOR 09 th  MARCH, 2026 ON 'IMPACT OF RISING GLOBAL CRUDE OIL PRICE ON INFLATION IN THE COUNTRY'

(a): The price of both global crude oil and the Indian basket has been on a declining trajectory for the past one year, till the geo-political clashes commenced in West Asia on 28 February 2026.  Between  the  end  of  February  and  uptill  2 nd March  2026,  the  Crude  Oil  FOB  Price (Indian Basket) rose from USD69.01/barrel to USD80.16/barrel. Given that India's inflation is near the lower bound, the impact on inflation is not estimated to be substantial at this point. The Monetary Policy Report of the Reserve Bank of India (RBI), released in October 2025, estimated that if crude oil prices are higher by 10 per cent than the baseline assumptions, and assuming full  pass-through  to  domestic  prices,  inflation  could  turn  out  to  be  higher  by  30 basis points. However, the medium-term impact of the global crude oil price rise on inflation depends on several factors, including exchange rate movements, global demand and supply situation, monetary policy transmission, the state of general inflation, and the extent of the indirect pass-through.

(b) and (c): The average retail inflation measured by the Consumer Price Index declined from 5.4  per  cent  in  2023-24  to  4.6  per  cent  in  2024-25  and  further  to  1.8  per  cent  in  2025-26 (April - January). The headline inflation for January 2026 stood at 2.75 per cent and is near the  lower  bound  of  the  RBI's  inflation  tolerance  band  of  4%  ±  2%.  As  part  of  inflation management,  the  Monetary  Policy  Committee  (MPC)  has  reduced  the  policy  rate  by  125 basis  points  cumulatively  since  February  2025.  Concurrently,  the  Government  has  also undertaken a series of administrative measures, including fiscal and trade policy, to control inflation and  mitigate its  impact  on  the  common  citizen.  These  include, inter alia , augmentation of buffer stocks for essential food items, strategic sales of procured grains in the  open  market,  facilitation  of  imports  and  export  curbs  during  periods  of  short  supply, implementation of stock limits to push more supplies of select commodities into the market, retail  sales  of  select  food  items  under  the  Bharat  brand  at  subsidised  rates,  market intervention for perishable horticultural and agricultural commodities, reduction in fuel taxes, creation  of  scientific  storage  capacity  and  above  all,  increasing  the  disposable  income  of individuals  by  exempting  annual  incomes  up  to  ₹12  lakh  (and  ₹12.75  lakh  for  salaried individuals with standard deduction) from income tax and the recent rationalization of Good and Services Tax (GST) rates.

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