To increase or not?

"India's retail inflation quickened to 3.40% year-on-year in March from 3.21% in February, government data showed." Reuters. Experts predicted it could rise to 4% if the conflict with Iran continues. Last month, "The government...extended the mandate for the Reserve Bank of India (RBI) to maintain retail inflation at 4%, with a tolerance band of 2 percentage points on either side, for another five years ending 31 March 2031." TOI. So, retail inflation is well under control. Apparently, "Fuel retailers are losing Rs 20 per liter on petrol and Rs 100 a liter on diesel as state-run firms continue to shield customers from oil price volatility by holding up pump rates." Costs will be passed on to consumers after 29 April, when assembly elections end. HT. The retail price of diesel is around Rs 90 per liter, varying from Rs 82.45 per liter in Chandigarh to Rs 96.48 in Thiruvananthapuram. goodreturns.in. It means, diesel prices could rise to nearly Rs 200 per liter after 29 April. "In 2023, the United States imported about 8.51 million barrels per day (b/d) of Petroleum from 86 countries." And "exported 10.15 b/d of petroleum to 173 countries and 3 US territories." So, the US was a net exporter of 1.64 million b/d of petroleum. eia.gov. Yet, on 20 April 2026, the highway price of diesel was $7.325 per gallon in Caliornia, down from $7.567 on 06 April. eia.gov. Taking 1 US gallon at 3.8 liters (unitconverters.net) and 1 US dollar at Rs 94 (xe.com), it works out to about Rs 181 per liter. The US taxes petrol at 18% and diesel at 17%. In the US, the oil industry is in the private sector. "Indian officials say the Iran war could be as disruptive to the economy as the Covid pandemic was six years ago and the damage could linger for years to come, threatening to knock the world's fastest growing nation off its path." However, they still see economic growth at 6.8%-7.2% in FY 27. ET. Does not seem like much of a knock. Actually, oil should not be that important because, "Oil imports as a percentage of GDP have fallen from 8.5% to 4.8% over the years." Petroleum products have fallen from 37% of total imports in 2014 to 26% in 2025 and the share of investments in renewables has increased from 23% in 2013-14 to over 40% in 2024-25. HDFC Fund. So why the moans? The price of crude oil fell from over $90 per barrel in 2014 to below $40 per barrel in 2015 and has stayed below $60 till this year. eia.gov. As prices fell the government merrily increased taxes on petroleum products to over 50% (cleartax.in) and raked in over Rs 40 trillion in revenue since 2014-15 to now (ppac.gov.in). On 23 April, the basket of crude oil for India cost $108.55 per barrel. ppac.gov.in. The real problem is, increasing the retail price by Rs 100 will cause prices of all goods to jump, infuriating people, and cutting taxes to reasonable levels, like in the US, could cause the fiscal deficit to balloon. If the government had passed on low prices to the people, it would have lowered prices, increased consumption and helped economic growth. People would have adjusted to any increase now. Moral of the story: don't loot the people. Honesty, after all, is the best policy.