News Analysis India

Tag: oil prices

  • High oil prices breaking our back, Jaishankar tells Blinken

    Express News Service

    NEW DELHI:  External Affairs Minister S Jaishankar on Tuesday told his US counterpart that developing countries are deeply concerned about oil prices as well as supply.

    Addressing a joint press conference with US Secretary of State Antony Blinken after holding bilateral talks in Washington, he said, “We are a $2,000 per capita economy. The price of oil is breaking our back.”

    Jaishankar said the energy market is under stress due to the Ukraine war and that not just the pricing but the very availability of oil has become an issue. He also clarified that India is able to service and supply military equipment purchased from Russia despite Western sanctions on Moscow, “Where we get our military supplies from is not an issue. We look at possibilities across the berth and exercise a choice which we believe is in our national interest. Having said that, we have also taken military aircraft from US, France and Israel as we have a tradition of multi-sourcing,’’ he added.

    On the Ukraine war, he said: “We have taken the position privately, publicly, confidentially and consistently that this conflict is not in anybody’s interest.” Blinken sought to justify the US’ F-16 aid to Pakistan, saying it helps it deal with threats emanating from Pakistan or from the region. “We’ve a responsibility to whomever we provide military equipment to, that it’s maintained and sustained,” he said.

    NEW DELHI:  External Affairs Minister S Jaishankar on Tuesday told his US counterpart that developing countries are deeply concerned about oil prices as well as supply.

    Addressing a joint press conference with US Secretary of State Antony Blinken after holding bilateral talks in Washington, he said, “We are a $2,000 per capita economy. The price of oil is breaking our back.”

    Jaishankar said the energy market is under stress due to the Ukraine war and that not just the pricing but the very availability of oil has become an issue. He also clarified that India is able to service and supply military equipment purchased from Russia despite Western sanctions on Moscow, “Where we get our military supplies from is not an issue. We look at possibilities across the berth and exercise a choice which we believe is in our national interest. Having said that, we have also taken military aircraft from US, France and Israel as we have a tradition of multi-sourcing,’’ he added.

    On the Ukraine war, he said: “We have taken the position privately, publicly, confidentially and consistently that this conflict is not in anybody’s interest.” Blinken sought to justify the US’ F-16 aid to Pakistan, saying it helps it deal with threats emanating from Pakistan or from the region. “We’ve a responsibility to whomever we provide military equipment to, that it’s maintained and sustained,” he said.

  • Edible oil to drop down by Rs 10-12/litre within a week: Sources

    The reduction in oil prices comes in the wake of Central Government reducing the import duty on edible oils making them cheaper.

  • Opposition members walk out of Lok Sabha proceedings over fuel price hike

    By PTI

    NEW DELHI: Opposition members from various parties in Lok Sabha on Friday walked out of proceedings over rising fuel prices, with a Congress MP questioning the need to hike price of petrol, diesel and cooking gas following a 137 days hiatus after polls in five states concluded.

    Gaurav Gogoi (Cong) raised the issue of rise in fuel prices during Zero Hour, saying after inflation and uneven recovery after the coronavirus pandemic, people needed a breathing space. He wondered why prices of petrol and diesel were increased three times in a week after a hiatus of 137 days.

    He claimed that tensions between Russia and Ukraine were simmering since December last year, but blaming the conflict now, the prices were hiked. “We don’t know how many more hikes await the people of India and people of India have just returned from Omicron. They want an environment where they can do their business but all these price hikes have increased the cost of business, especially the price of transportation and this will lead to inflation,” he said.

    He, as well as members from various opposition parties, sought a reply from the government as to why for 137 days they managed to keep the prices stable. They said Finance Minister Nirmala Sitharaman, who was present in the House, should respond.

    Members, including those from Congress, DMK, NCP, Left, Viduthalai Chiruthaigal Katchi (VCK) and IUML, walked out of the House to register their protest on the issue.

  • Always exploring all possibilities in global energy markets: India

    By PTI

    NEW DELHI: India on Thursday did not rule out buying discounted crude oil from Russia, saying it looks at all options at all points of time as a major importer of oil.

    At a media briefing here, Ministry of External Affairs (MEA) Spokesperson Arindam Bagchi did not give a direct reply to a question on whether India was considering taking up the Russian offer of cheap crude oil.

    “India does import most of its oil requirements, it’s met by imports. So we are always exploring all possibilities in global energy markets because of this situation that we face of importing our oil requirements,” he said.

    Bagchi said Russia has not been a major supplier of crude oil for India.

    “Let me just highlight that a number of countries are doing so, especially in Europe, and for the moment, I will leave it at that. We are a major oil importer and we are looking at all options at all points, we need the energy,” he said.

    Asked whether the purchase can be made under the Rupee-Rouble arrangement, Bagchi said he was not aware of the exact details on the offers.

    He said doing business in currencies Rupee and Rouble were in existence in past and that he was not aware of the current status of the arrangement.

    To another question on the impact of western sanctions against Moscow on the India-Russia trade, Bagchi said New Delhi will wait for it.

    “We will await details of any unilateral sanctions to examine their impact on our economic exchanges with Russia,” he said.

    Asked about India’s position on the Russian aggression against Ukraine, Bagchi said India has been in touch with all sides, including at the highest level.

    “We have been talking about the need for dialogue and diplomacy, not hostilities, clearly,” he added.

    When his comments were sought on reports that negotiations on resolving the crisis were focussed on Ukraine’s “neutrality”, the MEA spokesperson evaded a direct reply.

    “Our basic message has been the need for diplomacy and dialogue, that is the way forward. The exact contours of what kind of an understanding that can be reached, I would leave it to the protagonists involved, rather than comment on our views of what could be and what is on the table, which we are not even aware of,” he said.

  • Indian Oil Corporation buys Russian crude at deep discount

    By PTI

    NEW DELHI: Indian Oil Corporation (IOC), the nation’s top oil firm, has bought as much as 3 million barrels of crude oil that Russia had offered at steep discount to prevailing international rates, sources said.

    The purchase, made through a trader, is the first since Russia’s February 24 invasion of Ukraine that brought international pressure for isolating Putin administration.

    Sources aware of the matter said IOC bought Urals crude for May delivery at a discount of USD 20-25 a barrel to dated Brent.

    As the US and other western nations slapped sanctions on Moscow, Russia has begun offering oil and other commodities at discounted prices to India and other large importers.

    IOC made the purchase on modified terms that require the seller to deliver it to the Indian coast so as to avoid any complications that sanctions may lead to in arranging shipping and insurance.

    Unlike the sanctions the US imposed on Iran over its controversial nuclear programme, oil and energy trade with Russia has not been banned. This means international payment systems are available to settle any purchase made from Russia, they said.

    This wasn’t the case with Iran, which was cut off from the international money and security transfer system, SWIFT. Also, companies or entities investing or buying oil from Iran were sanctioned.

    India, which imports 85 per cent of its oil needs, is looking to cut spiralling energy bill through purchases from anywhere it can get at cheaper rates.

    Oil Minister Hardeep Singh Puri on Monday told the Rajya Sabha that the country will evaluate the Russian offer to sell crude oil at discounted prices after considering aspects such as insurance and freight required to move the fuel from the non-traditional supplier.

    “Let me again reiterate that in a situation like the one characterised by the pandemic in the last two years and in the last few weeks by a war or a military action taking place between Russia and Ukraine, the government will explore all options which are available,” he had said.

    The minister said he has had discussions with the Russian government officials. “Discussions are currently underway. There are several issues which are required to be gone into like how much oil is available either in Russia or in new markets or with new suppliers which may be coming in the market. Also, there are issues relating to insurance, freight and a host of other issues including the payment arrangements,” he had stated.

    New Delhi has historic diplomatic and defence ties with Moscow and has called for an end to the violence in Ukraine but stopped short of condemning the invasion.

    Many countries, including European nations, remain heavily dependent on fuel from Russia, the world’s second-largest crude oil exporter behind Saudi Arabia.

    India buys just 1.3 per cent of all its oil needs from Russia. Its decision to take up discounted Russian oil will not violate any of the US sanctions on Moscow, the White House has said.

    US President Joe Biden last week announced a ban on Russian oil and gas imports over the country’s invasion of Ukraine, targeting the main artery of Russia’s economy.

    “Our message to any country continues to be that abide by the sanctions that we have put in place and recommended,” White House Press Secretary Jen Psaki told reporters at her daily news conference on Tuesday.

    Asked about a media report on the possibility that India could take up the Russian offer of discounted crude oil, Psaki said, “I don’t believe this would be violating that (sanctions).”

    GlobalData, a leading data and analytics company, said given India’s neutral stance on the Russia-Ukraine conflict, Moscow’s offer of oil and other commodities at discounted prices will provide relief on the fiscal front.

    “India’s attempt to diversify its import sources will tend to reduce the financial burden on the government thereby reducing the risk of high import bill. Moreover, cheaper crude may bring down the current cost of production and help cool off inflationary pressures,” said Gargi Rao, Economic Research Analyst at GlobalData.

  • Unhelpful Modi govt has no moral authority to raise fuel prices, says NCP amid Russia-Ukraine war

    By PTI

    MUMBAI: The Narendra Modi government did not give relief to the people of the country when global oil prices were at its lowest, and, hence, it does not have the moral authority to hike fuel rates in the wake of the Russia-Ukraine war, the NCP said on Tuesday.

    NCP’s Maharashtra unit chief spokesperson Mahesh Tapase alleged that with the Assembly polls in Uttar Pradesh and four other states over, the Centre seems to be contemplating an “imminent rise” in the retail price of fuel.

    He noted that the global crude oil price has soared to $140 per barrel in the wake of the Russia-Ukraine war.

    “When the international price of crude was at its lowest, the Modi government didn’t give any relief to the citizens by lowering the retail prices of petrol and diesel. Hence, the Modi government should not cry about price rise of crude oil and has no moral authority to even think of any price hike in retail petroleum prices in the days to come,” Tapase said in a statement.

    The NCP leader said people had been hit hard by the COVID-19 pandemic and the resultant lockdown and any hike in fuel prices would severely impact them.

    “The Union government should absorb the burden and relieve the citizens from any upward revision of prices of petroleum products,” he said.

    The NCP leader also said the country was seemingly going through a phase of stagflation in which growth rate is reversing and inflation is on the rise.

  • Won’t have airlines to board if fare limits are not increased, says Aviation Minister Scindia

    By PTI

    NEW DELHI: There won’t be any airline in India to board if limits on domestic airfares are not increased as oil prices have jumped from USD 22 each barrel to USD 85 in the last eight months, Union Aviation Minister Jyotiraditya Scindia said on Thursday.

    At the ‘Times Now Summit 2021′, he said aviation turbine fuel (ATF) is about 40 per cent of an airline’s cost structure in the country.

    Domestic air travel became costlier on August 12 this year when the Aviation Ministry raised the lower and upper caps on domestic fares by 9.83 to 12.82 per cent.

    The ministry had increased the lower limit for flights under 40-minute duration from Rs 2,600 to Rs 2,900 — an increase of 11.53 per cent.

    The upper cap for flights under 40-minute duration was increased by 12.82 per cent to Rs 8,800. On Thursday, Scindia said, “Look at what has happened to ATF prices.

    Oil prices over the last eight months increased from USD 22 per barrel to USD 84. So, the airline’s cost structure has gone up by four times.”

    “Add to that the excise duty of 11 per cent and VAT charged by the state governments in the range of 1 per cent to 30 per cent. How is an airline going to survive unless it (ATF) becomes economical?” he posed. The reason for the Aviation Ministry raising the fare bands is that airlines must be given some cushion when there is a 400 per cent jump in the prices of raw materials.

    “If you are not able to give a 12.5 per cent hike on the revenue side then you and I won’t have an airline to board,” he added.

    India had imposed lower and upper limits on airfares based on flight duration when services resumed on May 25, 2020, after a two-month Covid lockdown.

    The lower caps were imposed to help the airlines that have been struggling financially due to coronavirus-related travel restrictions.

    The upper caps were imposed so that passengers are not charged huge amounts when the demand for seats is high.

    The caps mentioned by the government in its order does not include the passenger security fee, user development fee for the airports and the GST.

    These charges are added on top when a ticket is booked.

    The August 12 order also mentioned that the limit on airfares will remain in place for 30 days at any given time.

    On September 18, the ministry modified the August 12 order, reducing the roll-over period from 30 days to 15 days.

    Scindia said the Aviation Ministry is trying to reduce ATF prices by asking the state governments to reduce their VAT charges.

    “In the last four months, I have written to 25 chief ministers to make them understand how this VAT is holding back the states’ connectivity.

    “Over the last 40 days, Jammu and Kashmir, the Andaman and Nicobar Islands, Ladakh, Uttarakhand, Himachal Pradesh and Haryana have lowered their VAT on ATF from the range of 25 to 28 per cent to the range of 1 to 2 per cent. I salute the leadership of these states,” he said.

    Due to this, there has been much greater connectivity to these states in the last one-and-half months, Scindia added.