A report by brokerage firm Emkay Global Financial Services has sparked concerns over a possible rise in petrol and diesel prices in India. The firm has warned that a disruption in global oil supply routes, particularly through the Strait of Hormuz, could force fuel price adjustments. It estimates that the first round of increases could be around ₹10 per litre, though this would only partially address mounting losses faced by oil marketing companies.

According to Emkay, prolonged geopolitical tensions affecting the Strait of Hormuz could tighten global crude supply and keep oil prices elevated. Brent crude has reportedly been fluctuating in the range of $100–$120 per barrel amid ongoing uncertainty. Since a significant share of global oil passes through this route, any disruption directly impacts import-heavy countries like India. This has created sustained pressure on domestic fuel pricing mechanisms.

The brokerage further noted that Indian fuel retailers are currently facing rising under-recoveries, as retail pump prices have not kept pace with international crude benchmarks. It estimated that a ₹10 per litre price hike would still cover only about 53% of existing under-recoveries. However, such an increase could contribute to inflationary pressure, with Emkay projecting an impact of around 75 basis points on inflation, including secondary effects.

Also Read: India Stresses Need For Global South Representation In UN Security Council Reforms

Market and macroeconomic risks were also highlighted in the report. Emkay cautioned that a fuel price hike could trigger short-term volatility in equity markets, particularly since valuations are already near long-term averages. It also warned that sustained high crude prices could lead to additional rounds of price increases, likely implemented in phases. Sectors such as automobiles, cement, and lending institutions could face pressure due to higher operating and input costs.

In a separate but related assessment, Kotak Institutional Equities suggested a more severe adjustment scenario, estimating that fuel prices may need to rise by ₹25–₹28 per litre to fully align with global crude levels if prices remain around $120 per barrel. However, the Ministry of Petroleum and Natural Gas has dismissed reports of any immediate price hike, stating that no such proposal is under consideration. The government also emphasized that fuel prices in India have remained stable for nearly four years due to coordinated efforts to protect consumers from global volatility.

Also Read: Global Leaders Meet In Barcelona To Strengthen Liberal Democracy And Multilateralism