Surging energy demand and a severe fuel shortage in India led to power cuts and forced the government to raise the official price of gasoline and diesel, pointing to the climate- and Iran war-related challenges faced by Asia’s third-largest economy.

India has expanded electricity capacity in recent years, but a buildout is still ongoing, and the country is highly dependent on imports — particularly via the Strait of Hormuz — for its energy needs.

Record temperatures have driven unexpectedly high power requirements, while the fuel-price hike was the fourth in just 10 days. The broader impacts are likely to be significant: Goldman Sachs upped its inflation forecast for India, while ING said the rupee was vulnerable.