India's government raised fuel prices by 3 rupees ($0.03) per liter on Friday, directly increasing the burden on working-class people. In New Delhi, gasoline prices climbed to 97.77 rupees ($1.17) a liter, while diesel reached 90.67 rupees ($1.09) a liter. Manoj Kumar, a 48-year-old taxi driver in New Delhi, stated that the rise in fuel prices was adding to the strain on working-class people. “For common people like us, even one rupee has great value. People work so hard from morning till evening just to make ends meet. The government is not seeing this,” he said.
The State's Role in Burden Shifting
The price increases came as the government moved to offset losses due to higher global oil prices. India imports approximately 90% of its oil and has been significantly affected by rising energy costs and supply disruptions linked to the Iran war and the closure of the Strait of Hormuz. The country had previously avoided raising retail fuel prices despite sharp increases in energy costs, making it one of the last major economies to pass higher crude prices on to consumers.
Prime Minister Narendra Modi on Sunday urged Indians to adopt voluntary austerity measures. Modi called on people to work from home where possible, limit foreign travel, and reduce purchases of gold. He described fuel conservation and saving foreign exchange as an act of “patriotism,” encouraging greater use of public transportation, carpooling, and lower fertilizer consumption. Opposition leaders noted that Modi’s appeal came only after a key round of state elections had concluded, pointing out that fuel prices were kept unchanged during the campaign period.
Earlier this week, India also raised import duties on gold and silver to 15% in an effort to curb demand for imports that drain foreign exchange reserves. The Indian rupee has fallen to record lows in recent weeks as higher oil prices increased pressure on imports and foreign exchange reserves. Authorities in New Delhi on Thursday announced fuel-saving measures, including mandatory work-from-home days for some government employees. Delhi Chief Minister Rekha Gupta stated that the 90-day campaign aims to reduce official fuel use and encourage people in the capital to rely more on public transportation instead of private vehicles. Under the plan, employees whose work can be done remotely will work from home two days a week, with private companies encouraged to adopt similar measures voluntarily.
Capital Accumulates Amidst Crisis
Amidst these measures impacting the working population, Ola Electric's board cleared a 20 billion rupee investment to expand its EV and battery-cell technology units in India. This investment, roughly $208.5 million, is expected to be completed by May 14, 2027, and is part of the company’s push toward manufacturing its own battery cells to improve profitability. This move highlights capital accumulation by private enterprise even as the state imposes austerity on the general population.
India has also accelerated ethanol blending in gasoline as part of its push to cut crude oil imports. Most fuel stations across the country now sell gasoline blended with 20% ethanol, and the government has proposed expanding the use of fuels containing 85% — or even 100% — ethanol in compatible vehicles. Energy experts have warned that while blending biofuel can help shield from global energy shocks, it can lead to further stressing already depleting groundwater resources, encroach on land meant for food crops, and impact older vehicles’ engines, indicating potential hidden costs for the environment and food security.