As the Middle East war has stretched beyond a month, energy prices have soared sharply, sending ripples across the globe. Iran’s chokehold of Strait of Hormuz has pushed fuel costs higher, hitting energy supplies for major economies. The impact is visible in multiple sectors in India, with higher costs of fuel and petrochemical products feeding into everyday operations. From infrastructure projects to aviation and hospitality, industries are being forced to adjust to a rapidly shifting cost environment. The impact is being felt through rising project expenses, increased operational costs and growing pressure on margins. While some sectors are absorbing part of the burden, others are considering price revisions or recalibrating plans, highlighting how deeply energy costs are influencing business decisions.
Infrastructure
Rising prices of bitumen and fuel shortages have pushed up road construction and maintenance costs in Himachal Pradesh, with per-kilometre costs increasing across projects and maintenance expenses also climbing. The state estimates a cumulative burden of nearly Rs 100 crore and is exploring funding support and project adjustments while maintaining quality.“Light diesel oil and bitumen shortage will hit road tarring and construction costs,” said Public Works Department Minister Vikramaditya Singh.“There is no doubt that global inflation is affecting India as well. The rise in prices of LPG, petrol, diesel and other petrochemical products has directly impacted bitumen and, consequently, road construction costs,” he added.“We may delay some targets depending on the international situation, but we will ensure that quality standards are maintained,” Singh said.
Aviation
Aviation turbine fuel prices have surged sharply, with rates crossing Rs 2 lakh per kilolitre for some carriers. While domestic airlines have been partially shielded through a staggered increase, costs have still risen, adding pressure to an industry where fuel accounts for around 40% of operating expenses.“Due to the closure of Strait of Hormuz and extraordinary situation in global energy markets, the price of ATF for domestic markets was expected to increase by more than 100% on April 1,” the Ministry of Petroleum and Natural Gas said.“In order to insulate the domestic travel costs from the substantial increase in international prices, PSU Oil Marketing Companies of the Ministry of Petroleum, in consultation with the Ministry of Civil Aviation, have passed only a partial and staggered increase of 25% (only Rs 15 per litre) to the airlines. Foreign routes will pay for the full increase in ATF prices consistent with what they pay in other parts of the world.“Civil Aviation Minister Rammohan Naidu Kinjarapu said, “This calibrated approach will help shield passengers from sharp fare increases, ease the burden on domestic airlines, and support the continued stability of the aviation sector at this crucial juncture. It will also benefit the broader economy by ensuring the smooth movement of cargo and maintaining vital air connectivity for trade and logistics.”
Hospitality
Higher commercial LPG prices have added to the challenges faced by hotels and restaurants, where operating costs have already risen by around 20% amid the West Asia conflict. With business volumes declining and expenses climbing, establishments are now considering increasing menu prices to offset the growing financial pressure.“The latest hike in commercial LPG cylinder prices has added yet another layer of pressure on already squeezed margins. Given this scenario, hospitality establishments may now be left with little choice but to consider an upward revision in menu prices to partially absorb the escalating cost burden,” said HRAWI spokesperson Pradeep Shetty.
Poll
How do you feel about the potential rise in number of projects being delayed due to rising costs?
Meanwhile, the government has repeatedly assured thad the country has adequate energy supplies. Earlier this week, the Centre stated that there was no shortage of LPG in the country, and that it was prioritising Piped Natural Gas, adding that it had adequate diesel and petrol supply.
