NEW DELHI, Feb 26: With polling still on for the elections to the Uttar Pradesh and Manipur state assemblies, the centre on Saturday assured the people of keeping a check on crude oil prices, and in necessary release oil from its strategic reserves to mitigate market volatility in view of the rising prices of crude in the international market in the wake of Russian invasion in Ukraine.
“Government of India is closely monitoring global energy markets as well as potential energy supply disruptions as a fall out of the evolving geopolitical situation. With a view to ensuring energy justice for its citizens and for just energy transition towards a net zero future, India stands ready to take appropriate action for ensuring ongoing supplies at stable prices,” a statement issued by the petroleum ministry said. It further said that the government is also ready to release oil from its strategic reserves to mitigate market volatility and keeping a check on crude oil prices.
Government’s assurance has come amid speculations that petrol and diesel prices, which have been kept unchanged for 113 days now since November 4, 2021 (when they had come down slightly after excise duty was cut on Diwali), may again rise owing to geo-political tensions arising out of Russia-Ukraine conflict. Politically too, there have been indications that once assembly elections conclude on March 7, fuel rates may see a hike due to rising global crude oil prices.
Oil prices, however, had slipped on Friday after sharp rises early in the session on concern over potential global supply disruptions from sanctions on major crude exporter Russia. The April Brent crude futures contract fell $1.15, or 1.2 per cent, to settle at $97.93 a barrel, after climbing as high as $101.99. The more active May contract shed $1.30, or 1.4 per cent, to $94.12. The US West Texas Intermediate (WTI) crude fell $1.22, or 1.3 per cent, to settle at $91.59 a barrel, after hitting a session high of $95.64. For the week, Brent rose about 4.7 per cent, while WTI was on track to rise about 0.6 per cent.
On February 24, Russia’s invasion of Ukraine boosted prices above $100 a barrel for the first time since 2014, with Brent touching $105, before paring gains by the close of trade, Reuters said further.
Indian government on November 4, 2021, had slashed excise duty on petrol and diesel prices which had brought down the rates to some extent. Excise duty on petrol was reduced by Rs 5 per litre while on diesel it was reduced by ₹ 10 a litre while different state governments also cut down VAT on petrol and diesel in their respective states bringing some relief to the people.
India had, in November last year agreed to release about 5 million barrels of crude oil from its emergency stockpile in tandem with the US, Japan and other major economies to cool international oil prices. This was the first time ever that India, which stores 5.33 million tonnes or about 39 million barrels of crude oil in underground caverns at three locations on the east and west coasts, had agreed to release stocks for such purpose. That was when crude was at $82-84 per barrel. Now, it is much higher than that. The US is trying to do a coordinated release with other consuming nations to cool rates again. The statement did not say how much oil India will release.
(Manas Dasgupta)
