According to Petroleum Minister Dharmendra Pradhan, India as a major consumer of crude oil is keeping a tab on the situation which has developed as the US-Iran crisis deepened on Wednesday.
Answering a question during a Cabinet briefing here, the minister said that while the government is keeping a close watch on the developing situation, it is also preparing itself to face any eventualities arising out of the crisis.
Further, Pradhan said that Foreign Ministry is in constant touch with countries in the region.
The geopolitical tensions pushed Brent prices to a high of $71.75 per barrel earlier in the day, it traded at over $68 per barrel mark.
At present, India imports over 80 per cent of all its crude oil needs, thereby any surge in global prices has a cascading impact in the country's inflation.
In macroeconomic terms, a 10 per cent rise in crude oil prices has the potential to push retail inflation by up to 20 basis points, apart from impacting forex reserves, current account deficit and the rupee strength against the US dollar.
Currently, petrol prices in Delhi stood at Rs 75.74 per litre, while diesel costs Rs 68.79.
The geopolitical tensions also impacted the country's stock markets.
The BSE Sensex closed lower by 51.73 points or 0.13 per cent to 40,817.74 points. Similarly, the NSE Nifty closed lower. It ended the day's trade at 12,025.35 points down 27.60 points or 0.23 per cent.
Besides, the day's events led investors to invest heavily in safe asset class gold whose prices rose at India's largest futures market, Multi Commodity Exchange (MCX) traded at Rs 40,849 per 10 grams at 4.23 p.m.
( With inputs from IANS )