India, the world’s third-largest energy importing and consuming country, on Saturday said it is closely monitoring global energy markets to track any supply disruptions in the aftermath of the Russia-Ukraine conflict, and strategic Cooling prices from storage will support the release of oil.
International oil prices hit a seven-year high of $105.58 on February 24 on concerns about supply disruptions as a result of Russia’s attack on Ukraine. Rates have dropped below US$100 as energy supplies were shut down due to Western sanctions against Russia.
“The Government of India is closely monitoring global energy markets as well as potential energy supply disruptions, as it stands out from the evolving geopolitical situation,” an oil ministry statement said.
Though supply avenues are open, prices are likely to decline. Petrol, diesel and LPG (LPG) rates have remained on election-related freeze for almost four months now, but it is expected that soon after the elections in Uttar Pradesh next month, public sector oil companies will pass on the increased oil prices to consumers. will pass.
“To ensure energy justice for its citizens and energy transition towards a net zero future, India stands ready to take appropriate action to ensure supply at stable prices,” the statement said without elaboration.
It made no direct reference to consumer prices following the hike in international rates.
“India is also committed to supporting the initiative for release from strategic petroleum reserves, easing market volatility and moderating crude oil price hikes,” it said.
Asia’s third-largest economy last November agreed to release nearly 5 million barrels of crude from its emergency reserves, along with the US, Japan and other major economies, in a bid to cool international oil prices.
This was the first time that India, which stores 5.33 million tonnes or about 39 million barrels of crude oil in underground caves at three locations on the east and west coasts, had agreed to release stocks for such a purpose. That was when crude was at $82-84 a barrel. Now, it is much more than that.
The US is trying to do a coordinated release with other consuming countries to allow rates to cool again. The statement did not specify how much oil India would release.
Industry sources said the difference between the retail selling price and cost of petrol and diesel is more than Rs 10 per litre, which if passed after the completion of elections next month will lead to an increase in the rate of inflation which is already above . RBI’s tolerance level is 6 per cent.