Fuel prices in India are soaring. In the meantime, Russia has offered oil to India at a steep discount on the direct sale of oil as growing international pressure lowers the appetite for its barrels elsewhere following the invasion of Ukraine, as per the people with knowledge of the matter.
Currently, oil marketing companies have started increasing petrol and diesel rates across the country. Meanwhile, the government was closely monitoring the global energy market situation in the backdrop of evolving geopolitical events, Minister of State for Petroleum and Natural Gas Rameswar Teli said.
Teli further added that if required, the government would release the strategic petroleum reserve (SPR) to mitigate market volatility and calm the rise in crude oil prices.
The sanctions-hit country is offering its flagship Urals grade to India at discounts of up to $35 per barrel on pre-war prices to entice India to lift more shipments, according to people who asked not to be identified because the discussions are private. Headline Brent prices have increased about $10 since then, implying an even larger reduction than current prices.
Prices for petrol and diesel
While OMCs paused retail price revisions during the period when international oil prices spiked to a 14-year high of USD 139, petrol and diesel prices have been revised 9 times since March 22, totalling a hike of Rs 6.4 per litre till Friday.
While OMCs have snapped up distressed Russian oil being offered at a deep discount post-Ukraine war, Minister of State for Petroleum and Natural Gas Rameswar Teli said: “less than 1 per cent of total crude oil (is) imported from Russia in the year 2021-22 (till January).
The Minister said Indian oil and refining companies in the public and private sector import crude oil from diverse sources, including those in Russia, through business-to-business arrangements, based on technological and commercial considerations and domestic requirements.
India’s Oil Reserve
INTERNATIONAL OIL PRICES
Brent crude futures slid to $104.63 a barrel on Friday. According to the Reuters report, US West Texas Intermediate (WTI) crude futures fell to $99.89 a barrel.
India has taken a soft stance against Russia’s actions in Ukraine. However, the U.S. and its partners dealt with the matter differently, and they tried to isolate and punish Moscow over the invasion of its neighbour. India remained silent, remained neutral and never criticised Moscow’s attack.