New Delhi: Prime Minister Narendra Modi has said the Union government absorbed Rs 43 per litre of a potential diesel price increase during the West Asia conflict, limiting the increase passed on to consumers to Rs 7 per litre in an effort to protect farmers and the wider public from rising global crude oil prices.
Speaking at the India Today Group’s Kisan Tak Bharat Agriculture Conference 2026 at Bharat Mandapam in New Delhi on November 12, Modi said international crude oil prices had climbed from around $70 to $122 per barrel within a few weeks. According to the Prime Minister, the increase in global prices meant that diesel prices in India would otherwise have needed to rise by at least Rs 50 per litre.
He said the government decided not to transfer the entire increase to consumers and farmers. Instead, it limited the diesel price increase to Rs 7 per litre and took on the remaining Rs 43 per litre burden.
The Prime Minister also said the government had been bearing a financial burden of approximately Rs 14,000 crore every month to shield consumers and farmers from higher fuel costs.
The remarks came as part of his address on agricultural development, farmer welfare and the impact of international market uncertainties on India’s farming sector.
West Asia conflict and rising crude oil prices
The Prime Minister linked the potential increase in diesel prices to the sharp movement in international crude oil prices during the conflict in West Asia.
Crude oil is a major input in the production of transport fuels, and a sustained rise in global prices can increase the cost of importing and supplying petroleum products. For India, which depends significantly on imported crude oil, international price movements can influence the economics of domestic fuel supply.
Modi said the increase from approximately $70 to $122 per barrel within a few weeks had created a major challenge for the country. He argued that passing the full increase on to consumers would have placed additional pressure on households, businesses and farmers.
Diesel is particularly important to agriculture because it powers tractors, irrigation pumps and other farm machinery. It is also widely used in transporting agricultural inputs and moving produce from farms to markets. A substantial increase in diesel costs can therefore affect several stages of the agricultural supply chain.
The Prime Minister said the decision to absorb most of the potential increase was taken in the interest of farmers and consumers. He also claimed that diesel prices in neighbouring countries had risen by around 40 to 50 per cent during the same period, while India limited the increase.
Government claims monthly burden of Rs 14,000 crore
A significant part of the Prime Minister’s announcement was his estimate of the financial burden being borne by the government.
Modi said the government had been absorbing a burden of around Rs 14,000 crore every month to prevent the full impact of higher international fuel prices from reaching consumers and farmers.
The figure was presented as an indication of the scale of intervention required to manage the effects of the global energy-price shock. However, the Rs 14,000 crore monthly estimate and the calculation of Rs 43 per litre were claims made by the Prime Minister in his address.
The announcement did not provide a detailed breakdown of how the monthly amount was calculated, how the burden was distributed among government finances and oil companies, or the precise period covered by the estimate.
The distinction is important because the impact of international crude prices on domestic fuel costs can involve several components, including taxes, refining and distribution costs, and the pricing decisions of oil marketing companies.
In a separate parliamentary response earlier in 2026, the Ministry of Petroleum and Natural Gas stated that petrol and diesel prices in India are market-determined, with public sector oil marketing companies taking appropriate pricing decisions. The government can also make fiscal interventions when necessary.
Fertiliser support remains a major part of farmer assistance
Alongside fuel costs, Modi highlighted government spending on fertiliser subsidies and the effort to keep essential agricultural inputs affordable.
He said India had spent Rs 16 lakh crore over the previous 12 years to ensure that farmers could access fertilisers at affordable prices.
Referring to the difference between international and domestic prices, the Prime Minister said a bag of Di-Ammonium Phosphate (DAP), which costs around Rs 5,000 in the international market, was being made available to Indian farmers for Rs 1,300.
Similarly, he said a bag of urea that costs approximately Rs 3,000 internationally was being supplied to farmers in India for less than Rs 300.
These figures were cited by Modi to underline the government’s role in limiting the impact of international price fluctuations on agricultural production costs.
Fertilisers are essential for maintaining crop productivity, while their prices can influence farmers’ decisions on cultivation and input use. Keeping them affordable is therefore an important component of agricultural support, particularly for farmers facing uncertain market conditions and changing production costs.
The Prime Minister argued that protecting farmers from external price shocks was necessary to sustain agricultural activity and improve rural livelihoods.
Agriculture central to India’s development goals
Modi also used the conference to discuss the broader performance and future direction of India’s agricultural sector.
He said agriculture had recorded average annual growth of more than 4 per cent during the previous decade, describing it as the first such decade since Independence. He also referred to the growth in milk, egg and fish production, as well as India’s annual agricultural exports crossing Rs 4 lakh crore.
The Prime Minister encouraged farmers to diversify beyond traditional crops such as wheat, rice and sugarcane. He called for greater adoption of natural farming practices and more attention to soil health, while emphasising the role of technology and engineering in reducing cultivation costs.
He also referred to the importance of modern machinery and innovation in agriculture, saying that scientists, engineers and young innovators were developing equipment and solutions that could make farming more efficient.
The address placed fuel affordability within a wider discussion of agricultural competitiveness. Diesel prices affect farm operations directly, while fertiliser costs and access to technology influence productivity and the financial viability of cultivation.
Fuel costs remain an important concern for farmers
The Prime Minister’s remarks highlighted the connection between global energy markets and domestic agricultural expenses. Any sustained increase in fuel prices can affect farmers not only through machinery and irrigation costs but also through transportation and the movement of agricultural commodities.
For consumers, diesel prices can influence freight and logistics expenses, potentially affecting the cost of goods across sectors. The extent to which higher fuel costs are passed on can depend on domestic pricing decisions and government policy measures.
Modi presented the reported Rs 43 per litre intervention as an effort to prevent the full impact of the international crude oil price surge from reaching Indian consumers and farmers.
The announcement also drew attention to the financial implications of shielding domestic users from global price movements. While the Prime Minister cited a monthly burden of Rs 14,000 crore, a detailed account of the intervention and its financing was not provided in the conference remarks.
The government’s stated approach, as outlined by the Prime Minister, is to limit the transmission of international fuel-price shocks to domestic consumers while maintaining support for farmers through affordable agricultural inputs. The longer-term impact of such measures will depend on global crude oil prices, domestic fuel-pricing decisions and the government’s ability to sustain its support.