Brent crude futures surged to nearly $115 per barrel after Houthi attacks targeted Saudi Arabia's civilian and energy infrastructure. This raised concerns about supply disruptions, pushing prices to a near six-month high.
In India, the crude oil basket averaged $120.08 per barrel so far in October, significantly above the Reserve Bank of India's projection of $95 per barrel for the second half of the fiscal year. These sustained high prices risk increasing import costs and inflationary pressures.
Higher crude prices threaten to raise transportation and production costs. Economists from Axis Bank estimate that public-sector support could reach around 1.7% of GDP if oil averages $100 per barrel, with every additional $10 increase adding 20 basis points to the support requirement, assuming retail fuel prices remain unchanged.
Responding to rising procurement costs, Adani Total Gas raised CNG prices by ₹4.45 per kg. The new rates are ₹98.47 in Ahmedabad, ₹102.60 in Faridabad, and ₹106.40 in Udaipur.
Spot LNG prices have climbed from $10–12 per MMBtu in February to about $30 currently. Lower domestic gas availability and supply curtailments have further increased procurement costs, contributing to the recent price revision.
Escalating tensions in the Middle East and increasing energy prices threaten India's import bill, government finances, and domestic fuel affordability, raising concerns about inflation and economic stability.
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