RBI Governor Sanjay Malhotra has said India may find it difficult to avoid an increase in petrol and diesel prices if the West Asia crisis continues and crude oil prices remain high.
Speaking at a conference jointly organised by the Swiss National Bank and the International Monetary Fund in Switzerland, Malhotra noted that rising crude prices are keeping pressure on inflation, fuel imports and the broader economy.
He said if the current global energy stress worsens further, the government may not be able to keep retail fuel prices unchanged indefinitely. With the conflict continuing, excise duties have been reduced, he added.
Malhotra also pointed out that state-owned fuel retailers are currently absorbing part of the impact of higher crude prices.
His remarks come as Prime Minister Narendra Modi has urged people to reduce petrol and diesel consumption to help protect foreign exchange reserves.
