Apr 03, 2026 15:33 pm IST

In Numbers: How Has India Kept Fuel Prices Low Even As Europe Sees 70% Spikes?

India imports 88% of its crude. Why then is it not seeing massive price hikes for fuel and LPG? Inside the unique strategy it's following...

Harshita Mishra, Deepanshu Mohan, Saksham Raj Harshita Mishra Deepanshu Mohan Columnist Saksham Raj Columnist

Deepanshu Mohan Columnist

Saksham Raj Columnist

Gas prices in Europe have surged by nearly 70% amid the West Asian crisis, intensifying volatility in global energy markets. Compounding this, Russia imposed a gasoline export ban effective April 1.

Since the Iran war, energy markets have been acutely destabilised. Eurozone inflation rose to 2.5% from 1.9%, driven largely by energy inflation at 4.9% year-on-year. A ₹74 surge in crude, a near-blockade of the Strait of Hormuz, and collapsing Gulf LPG flows should have triggered a domestic spiral across many countries. However, India has managed to contain the retail impact so far.

What's behind this divergence?

The Shock Transmission

The shock originated at a critical chokepoint: the Strait of Hormuz, through which nearly 25% of global oil flows transit. Disruptions pushed Brent crude from around $70 to over $120 per barrel, a rise of roughly 70%. Consequently, European gas prices rose by about 50%, while retail fuel prices increased sharply; Germany saw petrol rise 18%, Spain 34%, and Portugal's diesel rose nearly 17%. In several African economies, fuel costs are estimated to have surged by 30% to 50%. 

India's structural exposure was significant. Its crude import dependence stands at 88%, while LPG imports accounted for 60% of consumption, of which roughly 90% transits through Hormuz. With over 100 million households under the Pradhan Mantri Ujjwala Yojana reliant on subsidised LPG, this dependence has direct implications. 

Early indicators pointed to stress: LPG imports fell from 3,22,000 metric tonnes to 2,65,000 metric tonnes, while the Gulf's share in it dropped from around 60% to 34%. Under standard transmission dynamics, such a shock would have led to a sharp retail price increase.

Yet, unlike most economies, India prevented a full pass-through. Petrol and diesel prices remained largely unchanged, and LPG saw only a limited increase. Moreover, the government claims that it........

© NDTV