New Delhi, March 9 (NationPress) Finance Minister Nirmala Sitharaman addressed Parliament on Monday, asserting that the recent increase in global crude oil prices is not expected to significantly affect inflation rates in India, which are currently near the "lower bound".

She noted that the cost of imported crude oil had been declining over the past year until geopolitical tensions erupted in West Asia on February 28, 2026. In her response to a query in the Lok Sabha, she detailed how the price of oil from the Indian basket surged from $69.01 per barrel to $80.16 per barrel in the brief period from late February to early March 2026.

Since February 28, global crude prices have been on the rise, following military actions initiated by the US and Israel against Iran. The conflict has expanded across the Middle East, with Iran launching retaliatory strikes on US military bases.

In her statement, Sitharaman referred to the RBI's Monetary Policy Report from October 2025, which projected that a 10 percent increase in crude oil prices, assuming full pass-through to domestic prices, might elevate inflation by up to 30 basis points.

She emphasized that the medium-term effects of rising oil prices on inflation are contingent on various factors, such as exchange rate fluctuations, global supply and demand dynamics, monetary policy adjustments, overall inflation trends, and the degree of indirect price pass-through.

The average retail inflation, as gauged by the Consumer Price Index, has shown a downward trend, declining from 5.4 percent in 2023-24 to 4.6 percent in 2024-25, and further down to 1.8 percent in 2025-26 (April-January).

In January 2026, headline inflation was recorded at 2.75 percent, remaining close to the RBI's tolerance band of 4 percent to 2 percent.

To manage inflation, the Monetary Policy Committee has reduced the policy rate cumulatively by 125 basis points since February 2025. The government has also implemented several measures to control inflation and ease its impact on citizens, such as increasing buffer stocks for essential food items, strategically releasing procured grains into the market, and facilitating imports while imposing export restrictions during shortages.

Additionally, the government has introduced fiscal initiatives, including income tax exemptions for annual incomes up to Rs 12 lakh (and Rs 12.75 lakh for salaried individuals) to provide more disposable income to the middle class. Furthermore, GST rates have been lowered across various sectors to reduce consumer prices.