How rising fuel, milk and LPG prices could hit your festive budget

Image Credit: Screengrab from Zee News video and AI image. Zee News Managing Editor Rahul Sinha.

The Iran war is pushing crude oil above $100 a barrel just as Indian families prepare for Navratri and Diwali. 

Petrol and diesel prices have not been raised immediately, but the oil surge is putting fuel companies under heavy pressure and could raise transport and household costs if crude stays high through the festive season.

Iran war pushes crude oil above $100 a barrel

The renewed fighting in West Asia has put the oil market under pressure. Disruption around the Strait of Hormuz and attacks on shipping have raised fears that less crude will reach the global market.

Brent crude climbed to about $105 a barrel on Thursday. The Strait of Hormuz remains especially important because it is one of the world's main routes for oil and gas shipments.

That matters for India. The country imports more than 88% of the crude oil it needs, which means a prolonged rise in international oil prices can make India's energy bill much more expensive.

The Indian crude basket was reported at $108.91 a barrel on September 8. Higher oil prices are also putting pressure on the rupee, making imported crude even more expensive.

Petrol diesel price today: Are fuel rates going up?

For consumers, the immediate question is whether petrol and diesel prices will rise.

There is no confirmed immediate price hike. Petrol and diesel prices at fuel stations have remained unchanged even as the cost of crude has jumped. That means state-owned oil marketing companies are absorbing much of the increase for now.

Industry estimates suggest fuel retailers are currently losing around ₹5 on every litre of petrol and ₹23 on every litre of diesel they sell.

Brent crude: around $105 per barrel during Thursday's trading. Indian crude basket: $108.91 per barrel on September 8

If crude remains above $100 for a long period, the pressure on oil companies will increase. The government and oil companies would then face a choice between continuing to absorb the losses or passing part of the higher cost to consumers.

Could LPG cylinder prices rise before Diwali?

LPG is another area households will be watching. Cooking gas prices are linked to international energy markets, although retail LPG rates in India also depend on government policy and support given to oil companies.

A rise in crude does not automatically mean that domestic LPG cylinder prices will increase. But a prolonged energy shock can raise the cost of supplying LPG and increase pressure on oil companies.

For families planning their Navratri and Diwali spending, any increase in cooking gas would add another fixed expense to the monthly budget.

How expensive crude can reach your kitchen

The effect of expensive oil does not stop at the petrol pump. Diesel is widely used to move vegetables, milk, grains and other goods between farms, warehouses and markets.

If diesel costs eventually rise, truck and delivery costs can also increase. Businesses may then pass some of those costs to customers.

This is why vegetables, milk, packaged food and other daily items can become more expensive during a prolonged oil shock even when crude oil has no direct connection with their production.

Food prices already face another risk from weather. Weak rainfall in parts of the monsoon season has raised concerns about crops including rice, soybean, corn and pulses. Higher transport costs combined with weaker farm output could put more pressure on food prices.

Flights and festive travel could also cost more

Higher oil prices can also affect people planning to travel during Navratri, Dussehra and Diwali.

Aviation turbine fuel is one of the biggest costs for airlines. If international energy prices remain high, airlines could face higher operating costs. That may put upward pressure on ticket prices during a period when festive demand is already strong.

BRICS Summit puts energy security in focus

The oil shock comes days before India hosts the 18th BRICS Summit in New Delhi on September 12 and 13. Energy and food security are among the issues expected to be discussed as leaders gather in the capital.

Iranian President Masoud Pezeshkian and Russian President Vladimir Putin are among the leaders due to attend. The conflict involving Iran has complicated the summit because Iran and the UAE, both BRICS members, are now sharply divided over the war.

What should Indian households watch before Diwali?

The biggest number to watch is the international crude price. A brief jump above $100 does not necessarily mean petrol, diesel or LPG prices will immediately rise in India.

The risk becomes greater if crude stays around $100 to $110 or moves towards $120 for an extended period. That would increase the cost of India's oil imports and deepen losses for fuel retailers.

For households, the effect could eventually spread from petrol pumps to transport, groceries, cooking gas and travel. With the festive shopping season approaching, how long the oil shock lasts may matter more than any single day's crude price.