Fuel price spike: Worst-hit countries amid West Asia war and why India is an outlier

Fuel prices surge across 95 countries after Iran conflict, with spikes up to 68%. India holds steady for now amid global fuel shock.

• Global fuel prices surged, with some countries seeing 70% hikes.
• India's petrol prices remain unchanged despite global volatility
• India uses administrative controls to delay price hikes at pumps

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Petrol prices are rising worldwide after the West Asia war struck at the heart of energy supply.

As tensions involving the United States, Israel and Iran escalated, the risk to oil flows through the Strait of Hormuz, one of the world’s most critical energy chokepoints, pushed crude prices higher. Retail fuel prices followed quickly.

In the United States, petrol prices have risen nearly 20 percent, from $2.94 per gallon in February to $3.58, with several states crossing $4 and California breaching $5.

Globally, the surge has been even more dramatic.

After the latest escalation in the West Asia war targeted key oil and gas assets and raised risks around flows through the Strait of Hormuz, petrol prices have surged across at least 95 countries in under three weeks, with some markets seeing spikes of nearly 70 percent.

But in India, the numbers have been steady. 

95 countries, one pattern: Prices move up

Data compiled from Global Petrol Prices shows that at least 95 countries recorded increases in petrol prices between February 23 and March 11.

The steepest spikes are concentrated in import-dependent economies:

• Cambodia: +67.8 percent
• Vietnam: +49.7 percent
• Nigeria: +35 percent
• Laos: +32.9 percent
• Canada: +28.4 percent

Even advanced economies have not been spared:

• United States: +16.5 percent
• Germany: +13.3 percent
• France: +6.4 percent

Some countries update fuel prices monthly, suggesting more increases are likely to surface in April.

Asia feels it first and hardest

Asia’s dependence on Gulf oil has turned exposure into immediate stress.

• Japan imports about 95 percent of its oil from the region
• South Korea depends on it for nearly 70 percent

Both have already intervened:

• Japan is preparing to release strategic reserves
• South Korea has imposed fuel price caps for the first time in 30 years

In South Asia, the response has been more disruptive:

• Pakistan: four-day workweek, school closures, work-from-home mandates
• Bangladesh: universities shut to conserve energy

India is the exception, for now

While global prices surge, India has not seen any change at the pump.

Across major cities, Delhi, Mumbai, Chennai, Kolkata, Bengaluru and Hyderabad, petrol and diesel prices have remained unchanged between February 28 and March 19.

Delhi petrol: Rs 94.77 to Rs 94.77

Mumbai petrol: ~Rs 103.50 to ~Rs 103.50

This stability stands out against a rapidly moving global backdrop.

Why prices are frozen in India

India’s fuel pricing is not fully market-linked in real time.

Administrative controls and tax structures allow the government and oil marketing companies to absorb short-term volatility, delaying the pass-through of global crude price increases to consumers.

This creates a temporary disconnect between global oil markets and domestic pump prices.

But the gap won’t hold forever

India’s position comes with constraints.

• Over 85 percent of crude oil is imported
• Sustained high prices strain OMC margins
• Government may face pressure to cut taxes or increase subsidies

If crude prices remain elevated, the adjustment will eventually come, through price hikes or fiscal costs.

Fuel is just the first layer of the shock. The impact does not stop at petrol. Oil prices feed into:

Transport = higher logistics costs

Fertilisers =  rising food prices

Manufacturing = costlier goods

Economists cited by Al Jazeera warn that large oil shocks have historically preceded periods of high inflation and economic slowdown, with parallels drawn to 1973, 1978 and 2008.