India indicates readiness to release more oil reserves

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A man rides his trishaw loaded with empty plastic barrels which are used to carry oil in Ahmedabad

By Nidhi Verma and Sethuraman N R

New Delhi -India will take “appropriate” steps to calm the rise in oil prices, triggered by Russia’s invasion of Ukraine, the junior oil minister said on Monday, indicating the country could release more oil from national stocks if required.

India, the world’s third biggest oil consumer and importer, imports about 85% of its oil needs.

“Government of India is ready to take all appropriate action, as deemed fit, for mitigating market volatility and calming the rise in crude oil prices,” Rameswar Teli said in a written reply to lawmakers.

Last month India said it was prepared to release additional crude from its national stocks in support of efforts by other major oil importers to mitigate surging global prices.

Teli said in November the federal government had joined other major consumers to release 5 million barrels of oil from its strategic petroleum reserves to contain inflationary pressures.

On Monday, Teli said India is “closely monitoring global energy markets as well as potential energy supply disruptions as a fallout of the evolving geopolitical situation”.

India buys only a fraction of its oil from Russia but has been hit hard by a spike in global oil prices due to Western sanctions against Moscow, the world’s second largest crude exporter.

The Indian basket of crude oil had jumped to $112.59/barrel by March 11, after averaging $84.67/barrel in January and $94.07 in February.

Indian oil companies have not raised fuel prices since Nov. 4 to shield the customers from higher costs.

However, to ease the import cost for companies, India is considering a Russian offer to sell its crude oil and other commodities at a discount, Indian government sources said.

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(Reporting by Nidhi Verma and Sethuraman N R; Editing by Susan Fenton)