New Delhi – India is bracing for an “inevitable” increase in petrol and diesel prices, with a cumulative hike of approximately ₹7 to ₹9 per litre anticipated, according to renowned energy expert Narendra Taneja. Speaking on Business Today Television’s Market Masters show, Taneja outlined the factors contributing to the impending fuel price adjustment and discussed the implications of a changing global energy landscape for India.
Phased Hikes Expected to Manage Impact
Rather than implementing a sudden, significant increase, Taneja expects the government to adopt a “middle path.” This strategy would involve gradual, smaller hikes, potentially ranging from 50 to 90 paise at a time, aimed at mitigating the immediate financial shock on the public.
The government faces a delicate balancing act, as fuel prices are politically sensitive and directly impact a vast segment of the population, including an estimated 80 crore people living below the energy poverty line. Taneja emphasized the need to protect state-run oil companies like IOC and BPCL, which are crucial for national energy security but are currently under financial strain. He suggested measures similar to past “oil bonds” might be considered to provide these companies with stability.
Weakened OPEC: Good News for India’s Energy Security
Taneja also highlighted a significant shift in the global oil market: the weakening influence of OPEC. He described the cartel as a “divided house” over the past three years, with member nations like the United Arab Emirates increasingly disregarding production quotas to pursue their own capacity expansion goals.
For India, a major energy importer, a weakened OPEC is “very good news,” Taneja stated. He characterized the concept of oil cartels as “medieval” and ill-suited for the modern era. He argued that deepening direct energy ties with individual nations, such as the UAE, offers a more sustainable and geopolitically beneficial path for India’s energy security than relying on traditional cartel structures.
Key Takeaways from Narendra Taneja:
- Inevitable Price Increase: Petrol and diesel prices likely to rise by ₹7-₹9 per litre.
- Gradual Implementation: Government expected to opt for smaller, phased hikes (e.g., 50-90 paise).
- Government Dilemma: Balancing public impact with financial stability for state-run oil companies.
- Weakened OPEC: A divided OPEC is advantageous for India, promoting direct bilateral energy ties.