People who were celebrating the end of the U.S.-Iran conflict and the reopening of the Strait of Hormuz have received an unexpected reality check from the Indian government. Hopes that petrol, diesel, and cooking gas prices would soon come down have been dampened, as the Centre has clarified that fuel prices cannot be reduced immediately despite the easing of geopolitical tensions.
Speaking on Thursday, Minister of State for Petroleum, Natural Gas, and Tourism, Suresh Gopi, said that fuel prices had been increased by only around ₹3.94 per litre. However, he emphasized that even if global crude oil prices decline, the recent increase cannot be rolled back immediately.
He pointed out that although the Strait of Hormuz has reopened, heavy congestion of ships in the region means that cheaper crude oil will take time to reach India. Due to these logistical challenges and several other factors, an immediate reduction in fuel prices is not feasible.
According to the minister, Indian oil companies were severely affected during the West Asian conflict. He also noted that no state government came forward to reduce excise duties on fuel during the crisis, leaving the burden on the Centre. As a result, the central government reportedly suffered revenue losses of around ₹12,000 crore. Recovering this loss and restoring fuel prices to previous levels will take time, he said.
The situation is not unique to India. Many countries around the world were forced to rely on strategic fuel reserves after the closure of the Strait of Hormuz disrupted supplies. As inventories declined, countries had to purchase fuel at higher prices. Similar challenges were faced by the United States, Europe, and several other regions.
Although oil supplies have now resumed, numerous tankers from different countries are still waiting near the Strait of Hormuz. Loading crude oil onto these vessels will take time, and once loaded, the ships will have to navigate heavy maritime traffic before reaching their destinations. Consequently, fuel prices are unlikely to decline immediately anywhere in the world.
