Following pressure from US President Donald Trump, India’s decision to reduce its purchase of fuel from Russia is signaling an inevitable hike in domestic fuel prices, set to inflate the cost of living.

With the supply of heavily discounted Russian crude oil on the verge of cessation, an inevitable surge in domestic oil and gas prices is looming. The Central Government is reportedly holding its breath to avoid immediate price hikes due to the upcoming Bihar Assembly elections. If prices rise now, market rates across the board are expected to escalate rapidly, potentially undermining the benefits of the GST structure reform.

The situation escalated with the Russian crude oil tanker ‘Furyia’, carrying 730,000 barrels of Urals crude, being stalled in the Baltic Sea since October 28th, instead of heading to Gujarat’s Sikka port. Tracking firms suggest that since the Russian Rosneft company and the vessel are on the EU and UK blacklist, the likelihood of it reaching India is low, indicating serious damage to Russia-India oil trade.

Reports indicate that the Trump administration imposed sanctions on Rosneft and Lukoil on October 22nd. Indian Oil Corporation has stated its adherence to international regulations, meaning the impact on India’s energy trade will begin manifesting from November 21st. Refinery officials confirm that the revenue savings previously achieved from Russian oil will diminish. Data shows that in the last reported week, daily oil imports from Russia to India dropped to just 1.19 million barrels, down from 1.95 million barrels per day just two weeks prior.