Russia-Ukraine War: Will Petrol Rate Increase? This Is What Govt Said On Fuel Price

The Government is closely monitoring global energy markets and potential energy supply disruptions as a consequence of the ongoing war in Ukraine.

Release Oil From Reserves To Check Prices

The Ministry of Petroleum & Natural Gas said that India is ready to take appropriate action to ensure price stability.

It aims to ensure energy justice for its citizens and for just energy transition towards a net zero future.

The government is also ready to release oil from its strategic reserves to mitigate market volatility and calm the rise in crude oil prices.

What Is SPR?

Strategic Petroleum Reserve (SPR) is kept by the government to use in cases of crisis or emergency.

India maintains SPR through a Special Purpose Vehicle called Indian Strategic Petroleum Reserves Limited (ISPRL).

ISPRL is a wholly-owned subsidiary of the Oil Industry Development Board (OIDB) with the Ministry of Petroleum and Natural Gas holding administrative control.

India holds 39.62 million barrels of crude oil through ISPRL, sufficient for 74 days.

Price Hike Post Polls?

Government’s assurance comes amid speculations that petrol and diesel prices which have been unchanged for 113 days since November 4 may rise again.

There are also political indications that that may happen. 

Once assembly elections conclude in Uttar Pradesh, fuel rates may see a hike due to rising global crude oil prices.

Potential Economic Effects

Crude oil prices crossed $100 a barrel this week for the first in over 7 years as a fallout of the Russia-Ukraine war.

Experts are suggesting that the figure may even reach $125 per barrel later this year.

Changes in petrol and diesel rates in India are directly influenced by the price of crude oil in the international market.

The current high global prices may affect the economy and hurt consumers, while also widening the country’s current account deficit.

Another Release To Happen Soon?

Last November India had 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 it had done so.

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.

However it is unclear how much oil India will release.