New Delhi: Amid the ongoing criticism by the West, including the United States of America, over India’s decision to continue energy imports from Russia, Centre on Friday made it clear that nations self-sufficient in oil or those themselves importing from Russia cannot credibly advocate restrictive trading, news agency PTI quoted government sources as saying.
According to reports, the increase in oil prices as a result of the Ukraine crisis has contributed to India’s challenges, and the push for competitive sourcing has inevitably intensified.
Sources also pointed out that Russia has been a marginal supplier of crude oil to India, accounting for less than 1 per cent of the country’s needs and that there is no government-to-government agreement for the import.
“India has to keep focusing on competitive energy sources. We welcome such offers from all producers. Indian traders too operate in global energy markets to explore best options,” sources were quoted by PTI in its report.
Russia has offered discounted crude oil and other commodities to India after the United States and its allies slapped sanctions on Moscow in response to President Vladimir Putin’s decision to attack Ukraine last month.
On the backdrop of massive sanctions being imposed on Moscow, European corporations are presently avoiding imports of Russian oil, a Hindustan Times reported said.
According to the Financial Times, Russian oil shipments to India, the world’s third-largest energy user, doubled in March. In March alone, Russia sold 360,000 barrels of oil per day to India, roughly four times the 2021 average.
Kpler, a commodities monitoring and analytics business Kpler pointed out that Russia is on track to reach 203,000 barrels per day for the whole month based on current export plans.
Meanwhile, the Ministry of External Affairs stated that India does import most of its oil requirements.
“India’s oil requirements are largely 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,” External Affairs Ministry Spokesperson Arindam Bagchi was quoted by PTI in its report.
“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,” Bagchi adds.
Reports suggest that imports supply 85 per cent of India’s crude oil demand.
However, Russia accounts for barely 1% of its total crude oil imports (almost 45,000 barrels per day in 2021). While this may not seem like much, a discount on Russian oil will undoubtedly reduce India’s import expenses.
As per a recent analysis by Nomura Research, every 10% hike in crude oil prices results in a 0.3 percentage point increase in India’s current account deficit (CAD), and hence a weaker rupee.