Between February 28 and March 2, 2026, the Indian basket price rose from USD 69.01 per barrel to USD 80.16 per barrel.

Finance Minister Sitharaman Says India’s Inflation Resilient Amid Rising Crude Oil Costs

Finance Minister Nirmala Sitharaman on Monday said that the recent rise in global crude oil prices is unlikely to have a significant impact on inflation in India, as the country’s inflation levels remain close to their low points. She made the remarks in Lok Sabha while responding to a written question on the potential effect of higher global crude prices on domestic inflation.

According to the minister, both global crude oil prices and the Indian basket of crude, which reflects the weighted average of international crude purchased by Indian refineries, had been on a declining trend over the past year. However, prices surged following the US and Israel military action on Iran in West Asia on February 28, 2026, and subsequent retaliatory strikes by Iran. Between February 28 and March 2, 2026, the Indian basket price rose from USD 69.01 per barrel to USD 80.16 per barrel.

Sitharaman noted that India’s consumer price index-based average retail inflation for 2025-26 (April–January) stood at 1.8 percent, significantly lower than 4.6 percent in 2024-25 and 5.4 percent in 2023-24. The RBI’s October 2025 monetary policy report had estimated that if crude prices exceed baseline assumptions by 10 percent and the impact is fully passed on domestically, inflation could rise by around 0.3 percent.

The minister added that medium-term effects on inflation depend on multiple factors, including exchange rate fluctuations, global demand and supply conditions, monetary policy transmission, base inflation, and indirect effects.