New Delhi, March 20 -- Global energy markets have been rattled by rising geopolitical tensions, pushing Brent crude close to $108 a barrel this week. Yet, petrol prices in India have remained largely unchanged.

The reason: a calibrated "shock absorber" system where oil marketing companies (OMCs) and the government smooth out global volatility-shielding consumers in the short term, but not without trade-offs.

For most countries, a spike in crude prices translates quickly into higher fuel costs. In the US, for instance, a gallon of regular petrol that averaged $2.94 in February now costs $3.58-a 20% increase-according to AAA Fuel Prices, a retail fuel price tracker from the American Automobile Association.

In contrast, petrol in cities l...