On Friday, India increased petrol and diesel prices by ₹3 per litre, marking the first hike in over four years. This adjustment, aimed at offsetting losses from rising global crude oil prices, has raised concerns about its cascading effects on retail inflation. According to Madan Sabnavis, Chief Economist at Bank of Baroda, further price increases may be necessary as the current hike may not fully cover the losses faced by oil marketing companies. Global oil prices surged past $120 per barrel due to geopolitical tensions but have since stabilized between $100 and $105 per barrel. The immediate impact on consumer price inflation is projected to be around 0.15%, but the secondary effects could be more pronounced, particularly in sectors like agriculture and transportation. Higher fuel and transportation costs are expected to push up operating expenses for industries such as food, FMCG, and tourism. Experts predict that even if fuel inflation surpasses 10%, overall CPI inflation may stabilize around 5%, influenced by various economic factors.