India imports 90 percent of its crude oil. Most of this import comes from Arab countries; However, since February 28, the Strait of Hormuz has been blocked due to the ongoing conflict between the US and Iran in the Middle East. As a result, there are huge disruptions in the import of crude oil from Arab countries. Initially, the country faced a more serious crisis regarding cooking gas; However, now the crisis related to petrol and diesel is also deepening, as fuel prices are continuously increasing.
**Inflation in wholesale market at record level**
The special thing is that due to the blocking of the Strait of Hormuz, global crude oil prices have increased by 88 percent. Due to this increase, the prices of gas, petrol and diesel have increased in India. While on one hand the country’s retail market appears to be stable, on the other hand, rising inflation in the wholesale market has broken the record of 42 months. This situation has strained the home and kitchen budget of the common man; If this situation continues, then rising inflation can prove to be economically back-breaking for the Indian people.
**Rising fuel prices will increase the price of everything**
According to market experts, the cost of petrol and diesel will directly increase the cost of transportation and freight. Due to this, the prices of agricultural raw materials and products are sure to increase. Moreover, rising diesel prices will also increase the operating costs of factories, as about 40 per cent of diesel consumed in India is used by trucks, buses, agricultural pumps, generators and industrial units. As a result, the increase in diesel prices will make almost every commodity—including vegetables, milk, fruits, packaged food, cement and steel—costlier.
**Possibility of increase in consumer and wholesale price indices**
Market experts estimate that the increase in petrol and diesel prices may increase the country’s overall inflation rate by about 20 basis points (0.20%). The consumer price index (CPI)—which serves as a benchmark to determine prices of daily necessities such as food, water, housing, transportation, healthcare, and education—is likely to increase. The increase in CPI places a heavy financial burden on families. Additionally, the Wholesale Price Index (WPI) is also expected to increase; This index determines prices within the wholesale market and includes things like fuel, raw materials, metals and manufactured goods. When goods purchased in bulk become expensive, companies always pass on these increased prices to their customers; As a result, in any case, the burden ultimately falls on the common man.
**Retail and wholesale inflation increased in April**
Importantly, due to the ongoing conflict in the Middle East, India’s retail inflation – measured by the Consumer Price Index (CPI) – increased from 3.40% in March to 3.48% in April 2026. At the same time, wholesale inflation – measured by the Wholesale Price Index (WPI) – rose to 8.3% in April from 3.88% in March. This level of inflation is the highest in 42 months. The largest increase in this figure was seen in the fuel and power sector, which grew by 1.05% to 24.71% in April alone; The main reason for this was the 88% increase in crude oil prices. As a result, the increase in petrol and diesel prices is pushing up the overall level of wholesale inflation.
**Fastest increase in prices of arhar dal**
According to traders, the sharpest increase in the prices of arhar dal (pigeon dal) has been seen in the last month. In the wholesale market, arhar has become costlier by about 12%, and is now priced between ₹9,000 to ₹11,800 per quintal. Prices of urad dal (black urad) have also increased by ₹500 to ₹800 per quintal. Additionally, prices of masoor dal (red lentils) have increased by about 10% since March.
**Wholesale inflation may reach 9%**
Economists estimate that if the crisis in the Middle East deepens, domestic wholesale inflation could rise to 9% in May and June. The impact of rising global inflation is soon expected to be visible on domestic fuel, manufacturing and transportation costs. Retail inflation is also expected to rise, as increased costs of fuel, food and transportation will eventually trickle down and impact retail prices.
