There may soon be a big relief in the prices of petrol and diesel in the country. Union Petroleum Minister Hardeep Singh Puri has indicated that if the prices of crude oil in the international market remain stable for the next two to three months, then the prices of fuel in India can be reduced.
Big change in oil import strategy
Minister Puri said that India has made a big change in its oil import policy and increased the sources of oil supply from 27 to 40 countries1. This strategic diversification has not only given India energy security, but also the freedom to buy oil at discounted rates amid global pressures.
Why are prices expected to fall?
At present, the international price of Brent crude remains around $68.96 per barrel, which is considered a favorable level for India. India has diversified its sources by increasing crude oil imports from countries like Russia, Brazil, Canada and Guyana, ensuring stability of supply. Along with this, domestic oil exploration and production is also being actively promoted in the country. If international prices remain at this level for the next few months, there is every possibility of reduction in petrol and diesel prices in the upcoming quarter.
Puri said, “We have enough oil. If something happens, we will deal with it.” He also said that India’s oil market share can increase from 16% to 25%.
Import from Russia and US warning
India imports more than 85% of its crude oil needs. Traditionally West Asia has been its main source, but in the last three years Russia has emerged as a major supplier. Currently, about 40% of India’s total oil imports come from Russia.
Recently, US President Donald Trump has warned that if Russia does not reach a peace agreement with Ukraine in 50 days, sanctions or high tariffs may be imposed on countries importing from Russia. On this, Puri said, “I am not worried at all. If something happens, we will deal with it”.
Indian Oil’s backup plan
Indian Oil Corporation Chairman A.S. Sahni said that if supplies from Russia are disrupted, India can return to the supply system before the Ukraine war, when imports from Russia were less than 2%.
Conclusion
Diversity and flexibility in India’s oil import policy has enabled it to deal with global crises. If crude oil prices remain stable, there is every possibility of reduction in petrol and diesel prices in the coming months. This can prove to be a big relief for common consumers.