What did RBI Governor Sanjay Malhotra say about the link between prolonged Middle East conflict and retail fuel prices in India?

RBI Governor Sanjay Malhotra stated that 'if this is to continue for longer period of time, it is just a matter of time before the government will pass on some of the price increases,' referring to rising crude oil prices due to the Middle East conflict; he noted that excise duties had been cut and state-run fuel retailers were absorbing cost increases so far, but sustained pressure would likely lead to higher retail fuel prices.

How does the RBI Governor view the adequacy of India's flexible inflation targeting framework amid the current supply shock from the Middle East conflict?

Malhotra said, 'We have this framework of flexible inflation targeting, but in such times it’s not sufficient,' emphasizing that 'fiscal coordination becomes critical if the supply shock is as big as it is.'

India’s RBI Governor Sees Fuel Price Hike If Oil Stays High

May 12, 2026

RBI Governor Sanjay Malhotra warned that sustained high oil prices from Middle East conflicts could force India to increase retail fuel prices. While inflation remains manageable, supply shocks pose risks requiring potential fiscal coordination.

bloomberg

2026-05-12

India’s RBI Governor Sees Fuel Price Hike If Oil Stays High

2026-05-24

India Rupee May Be Undervalued, RBI Governor Tells Mint

2026-07-16

Iran War, Monsoons Key Risk for Indian Economy, RBI Governor Says

2026-07-22

India's Central Bank Sold $6 Billion in May to Defend Oil-Hit Rupee, Data Shows

India’s RBI Governor Sees Fuel Price Hike If Oil Stays High

FAQ