Petrol Prices Hit ₹290/Litre Amid Mideast Crisis

The surge in petrol prices is a direct consequence of escalating geopolitical instability in the Middle East, which has severely disrupted global crude oil supply chains. Brent crude oil futures, a key international benchmark, have skyrocketed to over $115 per barrel, marking the highest price level since June 2022. This represents a staggering 68.23% increase compared to the same period last year, reflecting the market's anxiety over potential long-term supply shortages. India is particularly vulnerable to these external shocks, as it imports approximately 88% of its crude oil requirement. In February 2026, about 53% of India's total oil imports, amounting to 2.8 million barrels per day, originated from the Middle East. The recent turmoil has jeopardized these critical supplies, forcing Indian refiners to actively seek alternative sources from the U.S., Russia, and West Africa to ensure the nation's energy security. The recent decision by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to continue with production cuts has further tightened the global oil supply. The group is maintaining a total output reduction of 5.3 million barrels per day, which is about 5% of the world's daily demand. This collective strategy, aimed at stabilizing prices from the producers' perspective, has contributed to the upward pressure on global crude oil prices, directly impacting import-dependent nations like India. Domestically, the retail price of petrol in India is significantly influenced by a complex taxation structure, with combined central and state taxes accounting for a substantial portion of the final cost to consumers. The central government levies a uniform excise duty across the country, while each state imposes its own Value Added Tax (VAT) or sales tax, leading to price variations across different regions. These taxes, which are a major source of revenue for both the central and state governments, amplify the impact of rising international crude prices on the amount paid by consumers at the pump. In response to the escalating crisis, Indian refineries have deferred their planned maintenance shutdowns to maximize fuel production and build up buffer stocks. The country's strategic petroleum reserves, combined with storage facilities at state-run oil companies, provide a cushion of approximately 74 days of net oil imports. However, analysts caution that a prolonged conflict in the Middle East could lead to a significant increase in India's import bill, potentially widening the fiscal deficit and stoking inflationary pressures. The recent waiver from the U.S. Treasury, allowing India to purchase Russian crude oil that was already loaded onto vessels before the latest sanctions, is a temporary relief measure. This 30-day exemption is designed to mitigate the immediate impact of supply disruptions and help control spiraling global oil prices. While this provides a short-term sourcing option, the long-term stability of India's energy supply will depend on the de-escalation of the Middle East conflict and the diversification of its crude oil import portfolio.