‘Three Fs’ under pressure due to West Asia crisis: Sitharaman on fuel, fertiliser, forex

Union Finance Minister Nirmala Sitharaman on Monday said the ongoing West Asia crisis was not merely a geopolitical issue but one with direct economic implications for businesses and ordinary citizens, as she underlined the importance of Prime Minister Narendra Modi’s call to conserve foreign exchange.

Addressing an event organised by the Small Industries Development Bank of India (SIDBI) in Mumbai, Sitharaman said the conflict could lead to higher fuel costs, delayed cargo movement, expensive shipping, shortages of inputs, pressure on working capital and uncertainty in export orders.

“The West Asia crisis is not only a diplomatic or a geopolitical issue. For businesses and common people, it can mean higher fuel costs, delayed cargo, costlier shipping, shortages of inputs, pressure on working capital, and uncertainty in export orders,” she said.

“The government’s approach has been and will be to protect citizens, support MSMEs, safeguard exporters, keep supply chains moving and maintain economic stability. In this context, the PM’s call to conserve foreign exchange as far as possible is very important,” the finance minister added.

Explaining the context behind Modi’s appeal, Sitharaman said the country must focus on what she termed the “three Fs” — fuel, fertiliser and foreign exchange.

“I will delve into this because it has led to a lot of narrative around the country. We need to understand the context in which the PM made the call. It's due to high and dynamic international crude prices, high fertilizer prices, and high gold prices that are creating some challenges on the external front,” she said.

“For all these three, payments have to be made in foreign exchange. We should understand the context and focus on the three Fs — fuel, fertilizer and foreign exchange,” she added.

Prime Minister Modi had earlier urged citizens to avoid non-essential foreign travel, defer gold purchases and adopt fuel-saving measures such as public transport and electric vehicles to help conserve foreign exchange reserves amid the ongoing tensions in West Asia.

Addressing a public meeting in Hyderabad earlier this month, Modi also called for reviving practices adopted during the COVID-19 pandemic, including work-from-home, virtual meetings and video conferencing, to reduce fuel consumption.

“Use metros wherever metros are available. Use carpooling to go to places, and use the Railways if you have to transport goods,” Modi had said. “All of this will reduce dependency on petrol and diesel, and thereby cut the dependence on foreign currency.”

The remarks come at a time when state-owned fuel retailers — Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited — have faced mounting pressure from elevated global crude oil prices following the outbreak of conflict in West Asia.

After initially holding retail fuel prices steady despite rising crude costs, oil marketing companies have raised petrol and diesel prices four times since May 15, taking the cumulative increase to over ₹7.5 per litre.

According to the latest price notifications, petrol prices rose to ₹113.51 per litre in Kolkata, ₹111.21 in Mumbai and ₹107.77 in Chennai.

Diesel prices in the three metros increased to ₹99.82, ₹97.83 and ₹99.55 per litre, respectively.

Fuel rates vary across states depending on the incidence of value-added tax (VAT) and other local levies imposed by state governments.