Energy war: India to play ‘market card’ to get cheaper oil, says Puri

High energy prices will impact the growth of the Indian economy, says Puri.

New Delhi | Updated: 05 January, 2023 12:51 pm IST
Union Minister Hardeep Singh Puri (file photo)

Even as the West continues to pressurise India against buying Russian energy, Union petroleum minister Hardeep Singh Puri has said that New Delhi will continue to source oil from any country that offers it at cheaper rates.

During an interview, Puri said that Indian companies need to navigate cautiously in buying oil and gas, given the volatile market situation created by the war in Ukraine.

“Our oil companies or any entity in the world will buy from anywhere they get at cheaper rates,” he said, adding that restrictions on major oil-producing nations like Iran, Venezuela, and Russia has created a difficult situation.

The government of Prime Minister Narendra Modi is credited with successfully winning the diplomatic battle over the purchase of Russian oil in wake of Moscow’s military attack on neighbouring Ukraine in February last year.

Speaking about oil diplomacy, the minister said that New Delhi will give the highest priority to the interests of domestic consumers, who consume approximately 5 million barrels of crude oil per day.

“Obviously, we will buy from someone who is giving us better terms,” he said, highlighting that Russian oil imports constitute a dismal 0.2 per cent of India’s oil energy purchases.

When asked about the amount of oil purchases from Russia in 2023, Puri said, “You don’t determine how much oil you are going to buy. Purchasing is done by the private sector and OMCs (oil marketing companies) according to prices.”

The minister said that the Indian market has achieved a certain strength, which gives the government leverage. “We have reached the maturity where we play the market card. Because we are one of the defined consumers,” he said.

On the possibility of a further increase in oil prices, Puri said that OMCs will be benefitted in the long run if they provide a “cushion of affordability” to Indian consumers.

In a word of caution, the petroleum minister said that high energy prices across the world will impact the Indian economy.

“High oil prices will further exacerbate the current situation and drive the global economy into recession,” he predicted.

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