India Well-Positioned to Handle Oil Supply Disruption Amid Middle East Crisis
Union Minister Piyush Goyal stated on Saturday that India is adequately prepared to manage any potential disruptions in crude oil and fuel supplies, despite the escalating Middle East conflict. He emphasized that there has been "absolutely no disturbance" in the availability of petrol, diesel, or aviation fuel across the country.
Sufficient Stocks and Precautionary Measures in Place
Speaking at a CNBC-TV18 India event, Goyal highlighted that the government maintains sufficient stocks and has implemented precautionary steps as gas shipments and shipping routes face challenges due to the conflict. Key maritime routes have been effectively closed, impacting global trade.
"On crude oil, on fuel, we are pretty well placed. We have good stocks in hand. There's been absolutely no disturbance of any sort on the crude or the fuel front, petrol, diesel, aviation fuel," Goyal said, according to news agency PTI.
Diversified Energy Sources and Alternative Options
Goyal noted that kerosene production has been increased to provide an alternative cooking option if LPG supplies are delayed. "Incidentally, we are also covering through imports from diversified sources the requirements of LPG and LNG," he added.
The minister explained that India is being forced to shift to more distant sources for gas imports as traditional shipping routes become increasingly difficult. "The shipping times were barely three or four days, at best seven days, when these shipments of gas came into India," he said, adding that India is now exploring "significantly far away" alternative suppliers such as Canada, the US, and possibly Russia to meet domestic demand.
Geopolitical Turmoil as a Wake-Up Call
Goyal described the current geopolitical turmoil as a "wake-up call" for India but expressed confidence that the country has historically turned crises into opportunities. While acknowledging short-term economic pressures, he remained optimistic about India's growth trajectory.
"My own sense is that there will be a certain shortfall in economic activity in the short run, but we'll make up for that in the months to come. We will continue to be the fastest-growing large economy in the world for at least two more decades," Goyal asserted.
Support for Exporters and Economic Measures
On the trade front, Goyal revealed that the commerce ministry is in daily contact with export promotion councils and has activated a 24-hour helpline to address issues faced by exporters. "We've been engaging with all the export promotion councils on a daily basis. We have a 24-hour helpline ready to resolve any issues," he stated.
The ministry has developed schemes to provide insurance cover for export cargo that may be damaged, lost, or "inordinately delayed" due to disruptions in the Red Sea, the Strait of Hormuz crisis, or shipping line difficulties. "We are doing the inter-ministerial consultation. Next week we'll be coming out with some more concrete action agenda to support the exporters," Goyal announced.
Previous Assurances from Petroleum Minister
Earlier in the week, Petroleum Minister Hardeep Singh Puri assured the Lok Sabha that India remains prepared for prolonged disruption in global energy supplies caused by the Middle East conflict. Puri noted that commercial shipping through the Strait of Hormuz, which typically carries about 20% of the world’s crude oil, natural gas, and LPG, has effectively shut down.
However, India has increased non-Hormuz sourcing of crude to around 70% from 55% before the conflict. Puri also highlighted that India now imports oil from 40 countries, up from 27 in 2006-07. "There is no shortage of petrol, diesel, kerosene, ATF or fuel oil," he affirmed, while adding that domestic LPG production had been stepped up by 28% and gas supplies were being prioritized for households, transport, and agriculture.
Currency and Economic Outlook
Goyal also addressed concerns about the Indian rupee, acknowledging that it is under "stress" but assuring that there is "no reason for anyone to panic." He expressed confidence that the currency would recover more gradually, possibly after the war concludes.
The government's proactive measures and diversified energy strategy underscore India's resilience in navigating the challenges posed by the Middle East crisis, ensuring stability in fuel supplies and supporting the export sector during these turbulent times.
