Uday Kotak Warns of Impending Oil Price Shock Amid West Asia Conflict
‘It is coming, and it is coming big’: Uday Kotak on oil price shock
Mint
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Uday Kotak, founder of Kotak Mahindra Bank, warns that India must brace for significant oil price increases due to the ongoing conflict in West Asia. With crude prices surging to $120 per barrel, Kotak emphasizes the need for preparation as the impact on consumers and the economy is imminent.
- 01Uday Kotak warns of a significant oil price shock for India due to the West Asia conflict.
- 02Retail petrol prices in Delhi have remained unchanged at ₹94.77 per litre since October 2024.
- 03India's crude oil import bill rose to $174 billion in FY26, up from $137 billion in FY25.
- 04Prime Minister Modi has urged citizens to adopt voluntary austerity measures to conserve foreign exchange.
- 05Kotak emphasizes the need for a strong balance sheet and revenue generation for India's economic stability.
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Uday Kotak (founder of Kotak Mahindra Bank) cautioned that India needs to prepare for a significant oil price shock as the conflict in West Asia continues to escalate. He noted that while retail petrol prices in Delhi have remained steady at ₹94.77 per litre since October 2024, the surge in crude oil prices to $120 per barrel will soon affect consumers. Kotak highlighted that the Indian government has maintained these prices for over 18 months despite rising global oil costs, which has resulted in oil marketing companies incurring losses of up to ₹1,000 crore per day. Prime Minister Narendra Modi's recent call for voluntary austerity measures, including reducing discretionary imports and fuel consumption, underscores the urgency of the situation. Kotak also pointed out that India's heavy reliance on imported crude oil, which constitutes 85-90% of its requirements, makes it vulnerable to price shocks. He emphasized the need for India to strengthen its economic fundamentals to navigate these challenges effectively.
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Rising oil prices will likely increase fuel costs for consumers, affecting daily expenses and potentially leading to higher prices for goods and services.
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