New Delhi, May 15 (IANS) As petrol and diesel prices were raised by Rs 3 per litre on Friday, experts said that the fuel price hike could accelerate investment in renewable energy and diversified supply chains.

Dr. Manoranjan Sharma, Chief Economist at Infomerics Ratings, said the hike could push inflation higher by raising transportation and production costs, translating to higher prices for essential goods.

“Oil-importing nations may face decelerated growth, weaker industrial output, and reduced consumer purchasing power. However, this could accelerate investment in renewable energy, energy conservation, and diversified supply chains, making the crisis both an economic and strategic challenge,” Sharma said.

Sharma added that the crisis underscores the risks of excessive dependence on politically unstable regions for energy supplies.

As India imports nearly 85 per cent of its crude oil, the impact on foreign exchange reserves and fiscal stability is significant, and a weakening rupee could further raise import expenses, he said.

Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities, said such moves may further accelerate the push towards EV adoption and reduced dependence on imported fuel in the long term, Trivedi said.

“The hike may temporarily add to inflation concerns and impact transportation and consumption costs, but it also indicates the government’s focus on managing fuel subsidies and protecting forex reserves amid ongoing global uncertainty,” Trivedi said.

While fuel availability remains stable, the hike is likely to intensify inflationary pressures across the economy, according to Ajit Mishra – SVP, Research, Religare Broking Ltd.

“With global crude oil prices surging from nearly $69 in February to over $120 per barrel and currently at $107-mark, oil marketing companies were under mounting pressure due to rising input costs and shrinking marketing margins,” Mishra said.

In Delhi, petrol prices rose by Rs 3.14 per litre to Rs 97.77, while diesel became costlier by Rs 3.11 per litre.

Amid the Middle East crisis, oil companies have also raised CNG prices. Effective Friday, the price of CNG has increased by Rs 2 per kilogram. The new CNG rate in Delhi is Rs 79.09 per kilogram.

—IANS

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