It's not oil.

"India's external balance and government finances could be hit if oil prices stay for an extended period," as India "imports nearly 90% of its crude requirement and about 50% of its gas requirements." "A prolonged crisis could widen the country's current account deficit, weaken the rupee and stoke inflation, the government said," and "This concern has pushed the rupee to a record low and forced the central bank to sell dollars from its reserves." Reuters. In fact, the rupee has been weakening from long before the US and Israel launched their attacks on Iran on 28 February 2026 which caused the current rise in the price of oil. wikipedia. Since 2014, when Mr Narendra Modi first became prime minister (wikipedia) the rupee fell from 62.33 against the dollar to 88.72 in 2025, a depreciation of 42.33% (bookmyforex.com). One dollar buys Rs 92.38 this morning. xe.com. " Foreign investors have sold about $4 billion of Indian equities in January, adding to nearly $19 billion outflows last year. Corporate hedging demand has also weighed on the currency." Reuters. Blaming the current rise in the price of oil is deceiving because historically prices have been higher in the past. Brent crude is selling at $100.6 per barrel today (oilprice.com) but had risen to a high of $111.26 in 2011, $111.57 in 2012 and $108.56 in 2013 (macrotrends), dropping sharply to $53.03 in 2015 and $45.13 in 2016, during this government's tenure. But, while Indians were able to buy petrol at Rs 63.77 per liter in 2011 and Rs 68.57 in 2012, the retail price jumped to Rs 78.52 per liter in 2018 and has been over Rs 95 since 2021 as the government has increased taxes instead of passing on the benefits of lower prices to consumers (cleartax..in). If the government passes on the increase to consumers it will immediately raise transport costs and cause inflation and if it lowers taxes to keep the retail price of petrol at the same level the government will have to increase borrowing to plug the gap in revenue. In 2025, the Reserve Bank of India (RBI) cut its policy rate by 125 basis points to 5.25% (ddnews.gov.in) but yield on the benchmark 10-year bonds is at 6.677% this morning (in.investing.com). On 09 March, the RBI bought Rs 1 trillion worth of government bonds through open market operations to increase liquidity in banks and bring down borrowing costs but the yield on 10-bonds rose to 6.78% before closing at 6.72%. Mint. On top of selling dollars and buying government bonds the RBI has been paying rising record amounts of dividends to the government. It paid Rs 1.02,000 in 2023-24, Rs 2,10,874 in 2024-25 (panoplexa.com) and another record Rs 2.70 trillion last year (Mint). Naturally, the government has asked for Rs 3.16 trillion in this year's budget. MC. So, where has the money gone? Not to oil. As yet.