Fuel prices are expected to vary from one day to the next under a new pricing system. Photo: iStock

After a 19-day hiatus in the lead-up to elections in Karnataka state on May 12, oil prices in India have begun to rise again, spurring fears that increasing fuel costs may spur inflation and take a toll on share prices.

The uptick is largely seen as caused by the escalation in global crude oil prices, which are now more than $80 per barrel.

Oil prices have risen steadily in recent months amid fears of geopolitical instability, as producing nations attempt to rein in a supply glut. The United States’ move to withdraw from the nuclear accord negotiated with Iran by the Obama administration has extended a rally that has pushed the market to its highest level since 2014.

However, in India, state-owned oil companies chose not to increase fuel prices for 19 days in the lead-up to the Karnataka state election.

But as soon as polling was over, prices started rising, with petrol and diesel up by 98 paise and 1.15 rupees per liter respectively, the Times of India reported.

Meanwhile, Christopher Wood, the managing director of investment bank CLSA, has warned that rising oil prices are a major risk to investors in Indian equities, reports Business Standard.