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Finance Minister Nirmala Sitharaman Reacts To The West Asia War ; Informs Parliament That Oil Price Rise Will Not Impact Infation
In reply to a written question in the Lok Sabha, Sitharaman said the price of both global crude oil and the Indian basket has been on a declining trajectory for the past one year, till the geo-political clashes commenced in West Asia on February 28, 2026.
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The impact of global crude price rise on inflation is not estimated to be substantial at this point as India’s inflation is near the lower bound, Finance Minister Nirmala Sitharaman said .
In reply to a written question in the Lok Sabha, Sitharaman said the price of both global crude oil and the Indian basket has been on a declining trajectory for the past one year, till the geo-political clashes commenced in West Asia on February 28, 2026.
“Between the end of February and untill March 2, 2026, the Crude Oil FOB Price (Indian Basket) rose from USD 69.01/barrel to USD 80.16/barrel. Given that India’s inflation is near the lower bound, the impact on inflation is not estimated to be substantial at this point,” Sitharaman said.
She was replying to a question on whether the government has reviewed the impact of rising global crude oil prices on inflation in the country. Global crude prices have been rising since February 28 when the US and Israel launched military strikes on Iran who retaliated with attacks on US positions in the region, as well as Israel.
Replying to the question, the minister said that RBI’s Monetary Policy Report in October 2025, had estimated that if crude oil prices are higher by 10 per cent than the baseline assumptions, and assuming full pass-through to domestic prices, inflation could turn out to be higher by 30 basis points. However, the medium-term impact of the global crude oil price rise on inflation depends on several factors, including exchange rate movements, global demand and supply situation, monetary policy transmission, the state of general inflation, and the extent of the indirect pass-through.