Why is the high price of oil not producing inflation?

People cheered when the Reserve Bank "predicted a softening of inflation and an acceleration in the pace of economic expansion through fiscal 2018-19", wrote R Mahapatra. But, most ignored a fall in consumer confidence in the RBI Survey. "The current situation index (which is based on perceptions) has remained in the pessimistic zone since March 2017," said the RBI. In November 2016, about half the respondents in the RBI Survey said that they expected the economy to improve. "Today, only a third feel the economic situation has improved, while two-thirds of the respondents feel it has remained the same or worsened. In November 2016, 63% of the respondents expected the economic situation to improve. That number has steadily slipped to 48% in March 2018." Inflation expectation has gone up and "Indian companies shelved a record number of projects in 2017-18.These involved investments worth Rs 7.7 lakh crore, or $117 billion, of which 40% were scrapped in the quarter ended March alone". "But the government is not going to sit idly by and commit electoral hara-kiri," wrote M Chakravarty. A massive road building program to provide jobs, bank loans to small industries, affordable housing scheme, a mammoth recruitment program in the Railways and BJP ruled states of UP, Rajasthan and Madhya Pradesh, and a hike in Minimum Support Price to 150% for farmers. The government has already admitted that fiscal deficit will be worse than promised. To help out the RBI has allowed foreign portfolio investors to buy an extra half a percent of government bonds in this financial year and by another half a percent in the next. Limit of investment in corporate bonds has also been increased but not in bonds of states. States have been borrowing from the market at a compounded annual growth rate of 21.2% from 2012-13 to 2016-17, to reach Rs 3.8 trillion. A Khajuria is barely able to contain his elation because yields on the benchmark 10-year bonds have fallen from 7.8% to 7.17% and increased buying by foreign investors will bring in dollars and support the rupee. However, traders are still doubtful until banks start buying bonds, wrote K Goyal. Banks are reluctant to buy bonds because any fall in prices will have to be shown as losses on their books which are already overflowing with bad loans. Banks have been able to recover a "pitiful 10.7%" of Rs 2.7 trillion in bad loans they wrote off from 2014-2017, wrote A Iyer. Meanwhile, "Once his best friend, oil now looks menacingly at Narendra Modi," wrote Chakraborty and Hordern. Having massively increased taxes on fuel to finance an explosion of social schemes, Modi is unable to reduce taxes as the international price of oil goes up, to contain the fiscal deficit. If the soaring price of fuel is not fueling inflation then the economy cannot be growing. Can it?