With Brent crude nearing $100 a barrel and the Russia-Ukraine conflict further intensifying, India’s financial stability is facing a big challenge, Union Finance Minister Nirmala Sitharaman said on Tuesday. The Brent crude price is at its highest since 2014.

 

“It is difficult to say how crude prices will go. Even today, in the FSDC (Financial Stability Development Council), when we were looking at the challenges to financial stability, crude was one of the things. . . we voiced that we want a diplomatic solution for the situation developing in Ukraine. . . all these are headwinds,” she said.

 

Seeing the rising cost of Brent crude, the domestic fuel retailers are also expected to hike fuel prices after the state assembly elections. Natural gas prices will also rise on global cue, increasing the cost for industries.

 

On being questioned as to when the government would look at paring excise duties on fuel products, Sitharaman said, “I would like to remind you that a day before Deepavali, PM himself got prices lowered by Rs 5 and Rs 10 per litre on diesel and petrol, responding to public demand.”

 

“Many States, I am very grateful, followed suit and the burden on the consumer was brought down. When it comes to that stage [where the government has to decide on taxes] it will come out publicly,” she added.

 

It is expected that fuel prices could go up by Rs 7-8 per litre as Brent, the global benchmark crude, raced towards the $100 per barrel-mark on Tuesday ignited by Ukraine crisis.

 

The freeze on price revision since November is expected to be lifted once the last ballot is cast on March 7. Meanwhile, the Russia-Ukraine crisis will keep oil on the boil in the coming months. At the same time, this would impact India’s gas prices as well. India meets half its gas needs through imports by way of LNG, or liquefied natural gas.