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RBI governor hints at fuel price hike in India
13 May 2026

Reserve Bank of India (RBI) Governor Sanjay Malhotra has warned that India may have to raise retail fuel prices if the ongoing conflict in the Middle East continues.

His comments came after Prime Minister Narendra Modi called for voluntary austerity measures, such as cutting down on petrol and diesel consumption, and delaying gold purchases to conserve foreign exchange reserves.

'It's just a matter of time'
Insights

Speaking at a conference organized by the Swiss National Bank and the International Monetary Fund in Switzerland, Malhotra said, "If this is to continue for longer period of time, it is just a matter of time before the government will pass on some of the price increases."

He noted that excise duties had already been reduced while state-run fuel retailers were absorbing higher crude prices amid ongoing conflict.

RBI projects inflation at 4.6% for FY27
Economic outlook

India's inflation rate rose to 3.48% in April from 3.40% in March, coming in lower than expected as the government absorbed higher crude costs.

The RBI has projected a growth of 6.9% for this financial year with an average inflation rate of 4.6%.

Economists expect growth to slow further and inflation to rise due to the ongoing conflict in the Middle East.

RBI ready to overlook shocks if they're transitory
Policy

Malhotra said, "We are being more and more data dependent. We are taking it more meeting by meeting."

He emphasized that the RBI is flexible in its approach and is ready to overlook shocks if they're transitory. However, he warned that if these shocks become entrenched, action would be necessary.

The central bank's next monetary policy meeting is scheduled for June 5.