Why Leaders Ask Citizens to Save Fuel During Energy Crises

TL;DR

When PM Modi asked Indians to carpool, work from home, and skip gold purchases on May 10, governments don't issue such appeals because they've run out of policy options. They do it because they're buying time before an inevitable price hike while framing the sacrifice as national duty. India's 88% import dependency, frozen fuel prices for four years, and ₹30,000 crore monthly losses at oil companies explain why the appeal happened now and why it will likely be followed by ₹4-5 per litre increases within days.

The Speech That Started a Debate

On May 10, 2026, Prime Minister Narendra Modi stood at an inaugural event in Hyderabad and made what many are calling the most sweeping set of economic appeals in his twelve-year tenure. "We have to reduce our use of petrol and diesel," he said. "In cities with metro lines, we should try to travel by metro. If we must use a car, then we should try to car pool" (Deccan Herald).

He didn't stop at fuel. In the same address, Modi asked Indians not to buy gold for weddings for one year, reduce edible oil consumption, avoid foreign trips, cut chemical fertilizer use by 50%, and revive Covid-era work-from-home practices (Sunday Guardian Live). Seven appeals in one speech. Each targeting a different import drain on foreign exchange.

The response split along predictable lines. Home Minister Amit Shah called it a "visionary roadmap to make India a self-reliant and energy-secure nation" (Republic World). Rahul Gandhi, on May 11, dismissed all seven appeals as "not sermons but proofs of failure," arguing that after twelve years in power, the government has brought the country to a point where citizens "need to be told what to buy and what not to buy" (Deshbandhu).

Both readings miss the structural pattern. Conservation appeals by heads of state during energy crises are neither visionary nor failures. They're a communication strategy with a specific political and economic function.

What Actually Triggered the Appeal

Three months before Modi's speech, on February 28, 2026, the United States and Israel launched airstrikes against Iran. Iran retaliated by restricting nearly all commercial traffic through the Strait of Hormuz, through which roughly 20% of the world's seaborne oil had previously transited.

For India, the math was immediate and brutal. Before the crisis, approximately 45% of the country's crude oil imports transited the Hormuz route. Additionally, 90% of India's LPG imports came through the same waterway, along with over 55% of its LNG. When that route effectively closed, India lost access to nearly half its crude supply chain overnight.

Petroleum Minister Hardeep Singh Puri told the Lok Sabha in March that India was "navigating the most severe global energy disruption in recorded history" (PIB). That's not political hyperbole. The International Energy Agency characterised the Hormuz closure as the largest supply disruption in the history of global oil markets.

International crude oil prices tell the story in a single arc: from around $66 per barrel on February 26 to approximately $126 per barrel by early May, a near-90% surge in ten weeks (IISD).

India's Peculiar Vulnerability

India imports 88.6% of its crude oil as of the April-January 2025-26 period, according to Petroleum Planning & Analysis Cell data. That makes it the world's third-largest oil importer, consuming roughly 5.5 million barrels daily. The country's proved crude reserves have fallen 12% over the past decade, from 762 million tonnes in 2014 to 672 million tonnes in 2025.

This dependency has been decades in the making. During the 1973 OPEC oil embargo, India's import bill surged from $500 million to $1.4 billion in a single year, consuming 40% of export earnings and triggering inflation near 20% (KPIA Academy). The government responded by setting up a Fuel Policy Committee and eventually creating the Petroleum Conservation Research Association (PCRA) to institutionalize conservation messaging.

The structural problem hasn't changed in fifty years. Despite India reaching 50% of installed power capacity from non-fossil sources ahead of its 2030 target, and despite the Energy Statistics India 2026 report showing renewable capacity growing at 10.93% CAGR, the transport sector still runs almost entirely on imported petroleum.

Every $10 increase in global oil prices reduces India's GDP growth by 0.1-0.2 percentage points. At current price levels, India is spending an estimated ₹1,600-1,700 crore daily on fuel imports (Sunday Guardian Live).

The Real Audience: Oil Marketing Companies and Bond Markets

Here's what most coverage of Modi's speech misses: the appeal was not primarily addressed to citizens.

India's three public-sector oil marketing companies, Indian Oil Corporation (IOC), Bharat Petroleum (BPCL), and Hindustan Petroleum (HPCL), have been losing approximately ₹30,000 crore every month since the crisis began. That's ₹18 per litre on petrol and ₹35 per litre on diesel, absorbed silently while retail prices remain frozen.

How frozen? Petrol and diesel prices haven't been revised since April 2022. Four years. During that period, Brent crude has roughly doubled (Business Standard).

To put ₹30,000 crore monthly in perspective: India's entire annual budget for the Pradhan Mantri Awas Yojana housing scheme is approximately the same amount. The OMCs are wiping out an entire year of peak profitability every two months (Business Today).

Fitch Ratings warned in early May that Indian oil companies are "running out of buffer," noting that a sustained period of high crude with frozen pump prices could destroy EBITDA and damage credit profiles permanently.

The government's conservation appeal, then, functions as political preparation. Industry sources and government officials indicate that fuel prices will likely be hiked by ₹4-5 per litre before May 15. By first asking citizens to sacrifice, the government creates a narrative in which any price increase appears as a last resort rather than an overdue correction.

The Pattern: How Governments Signal Before They Act

This isn't new, and it isn't unique to India.

In 1973, India's response to the OPEC embargo began with "demand compression" through conservation messaging before moving to administrative controls (ScienceDirect). In 2008, the Manmohan Singh government reduced fuel subsidies only after weeks of public messaging about the "global oil shock." In 2014, the BJP government deregulated diesel prices only after months of framing about market realities.

The sequence is consistent: (1) acknowledge external crisis, (2) appeal for voluntary sacrifice, (3) implement policy adjustment that citizens might otherwise resist.

Several countries in South and Southeast Asia have already followed this playbook in the current crisis. Thailand, Indonesia, Pakistan, Bangladesh, and the Philippines have all introduced work-from-home policies or reduced office attendance to manage fuel consumption. India's appeal came relatively late, partly because the government had already taken fiscal steps: excise duty was cut by ₹10 per litre on March 27 (IISD), absorbing revenue losses of ₹14,000 crore per month (PIB).

The Diversification That Quietly Worked

One part of the story that gets less attention: India's supply diversification strategy, built over successive governments, has prevented a total collapse.

In 2006-07, India sourced crude from 27 countries. Today, it sources from 40 countries. When the Strait of Hormuz closed, Indian refiners rapidly pivoted to Russian crude (which now accounts for 30.4% of imports), followed by Iraq at 17.8%, Saudi Arabia at 14.2%, UAE at 11.4%, and the United States at 7.7%. Non-Hormuz sourcing has risen to approximately 70% of crude imports, up from 55% pre-conflict (PIB).

The Indian Navy launched Operation Urja Suraksha in late March, deploying warships to escort Indian-flagged cargo in the Persian Gulf. LPG production was ramped from 36,000 tonnes per day to 54,000 tonnes. Refineries were pushed to operate at over 100% capacity utilization.

None of this prevented the crisis from biting. LPG cylinder booking gaps reached 45 days in multiple cities, with black-market prices reportedly hitting ₹4,000-5,000. Urea production fell 30% in March due to gas supply constraints. But without the diversification infrastructure, the impact would have been catastrophically worse.

The Criticism That Has Merit

The opposition's critique, while politically motivated, lands on two substantive points.

First, the question of preparedness. India's strategic petroleum reserve covers roughly 9.5 days of import requirement, a fraction of what Japan (over 200 days) or South Korea (90+ days) maintain. The Oxford Institute for Energy Studies noted in March that successive governments "treated the strategic petroleum reserve program as important infrastructure rather than an urgent national security imperative," resulting in limited protection when the crisis hit.

Second, the subsidy structure itself may be counterproductive. The IISD argues that maintaining frozen fuel prices "weakens price signals that encourage fuel efficiency, shifts toward lower-emission transport options, and incentives for consumers to take up EVs." Fossil fuel subsidies in India are currently three times those allocated to clean energy. By absorbing the cost of high crude rather than passing it through, the government inadvertently discourages the behavioral shift it's now asking citizens to make voluntarily.

An opinion piece in The Core argues the quiet part out loud: the government hasn't mandated work-from-home because "which government would want to give the Opposition a chance to accuse it of not being able to manage fuel supplies?" Conservation is being requested, not required, because requirements admit the problem is worse than the messaging suggests.

What Citizens Actually Hear

When a prime minister asks people to carpool and avoid gold purchases, the message lands differently depending on who's listening.

For urban middle-class professionals who can work from home, the appeal is costless virtue. For autorickshaw drivers, delivery workers, and daily-wage laborers whose income depends on mobility, "use less fuel" is an instruction to earn less.

India imports 60% of its edible oil requirements. The appeal to reduce consumption doesn't acknowledge that cooking oil isn't discretionary spending for most households. Similarly, the suggestion to cut fertilizer use by 50% asks farmers to accept yield risk during a food security crisis.

The gap between what conservation appeals ask and what policy actually delivers is where public trust erodes. If the government can absorb ₹30,000 crore monthly in OMC losses to keep prices stable, citizens reasonably ask: why are you asking me to sacrifice while you haven't even raised prices?

The answer is politics. Price hikes before elections are electoral poison. Conservation appeals are free. And the political calculus is not irrational. The government reduced excise duty on March 27, spending ₹14,000 crore per month in lost revenue (PIB). It approved ₹30,000 crore in compensation to OMCs. India's LPG cylinder price at ₹613 in Delhi remains far below regional neighbours: Pakistan charges the equivalent of ₹1,046, Sri Lanka ₹1,242, and Nepal ₹1,208. These are real fiscal decisions with real costs. The government has absorbed significant pain. But it has also asked citizens to bear the behavioral adjustment that pricing would accomplish automatically.

The Path Forward No One Wants to Discuss

The IISD report offers a structural observation that neither the government nor the opposition engages with honestly: India's long-term answer isn't conservation messaging or even supply diversification. It's reducing the transport sector's dependence on imported petroleum entirely.

Electric car registrations in India jumped 50% year-on-year in March 2026, partly driven by the relative cost advantage as petrol prices stay elevated. India's renewable energy potential stands at 47 lakh MW, with solar accounting for 71%. Electric cooking is already cost-competitive with LPG in urban areas, and wider adoption could halve LPG import demand by 2050.

But these are generational transitions. In the immediate term, India will likely see its first major fuel price revision in four years within days. The conservation appeal has done its political work: it established that the crisis is real, that sacrifice is patriotic, and that whatever price adjustment comes next was preceded by the government first trying the gentler path.

Whether that framing holds depends entirely on whether prices stabilize after a modest hike or whether the OMC losses force a 20% correction that consumers actually feel.

The Numbers Behind the Appeal

A comparison of what India spends on the items Modi asked citizens to reduce:

Import Category	Annual Cost	% of Total Imports	Forex Drain
Crude Oil	~$130 billion	~25%	Largest single item
Gold	~$50 billion (700-800 tonnes)	~9%	Second largest
Edible Oil	~$15 billion	~3%	Controllable
Foreign Tourism (outbound)	~$25 billion	~5%	Growing

(Sunday Guardian Live, India Briefing)

The combined foreign exchange drain from these four categories exceeds $220 billion annually. Even a 10% reduction in consumption across these categories would save over $22 billion, equivalent to roughly 0.6% of GDP. That's not trivial during a balance-of-payments stress.

But here's the catch: none of these reductions can be mandated without political backlash. Gold has cultural weight. Edible oil is a kitchen essential. Fuel is an income prerequisite for millions. The appeal format lets the government float the idea of reduced consumption without the enforcement mechanism that would trigger protest.

What to Watch For

The price revision expected around May 15 will answer several questions:

Is the hike modest (₹4-5) or substantial (₹10+)?
Does the government phase in increases or rip the band-aid?
Do state elections in 2027 keep caps on diesel, which affects transportation costs more than petrol?
Does the government couple the hike with a direct benefit transfer for vulnerable households?

The larger question is whether this crisis accelerates structural reform or whether prices will simply be frozen again once crude dips below $100. India's energy policy has historically oscillated between crisis-driven reform and election-driven populism. The 2026 Hormuz crisis is testing which instinct wins.

The answer will shape not just this quarter's fiscal math but India's credibility when the next crisis arrives. Because if history is any guide, it will.

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Why Leaders Ask Citizens to Save Fuel During Energy Crises