Emphasising that India does not follow any ideology while procuring crude oil, Minister of Petroleum & Natural Gas HS Puri said the government’s “moral commitment” is to the common man by ensuring affordability, availability and sustainability.
“Look, the bottom line is we will buy from whomever we have to at the cheapest possible price. There is no ideology. There is no emotion. The only moral commitment we have is to our consumers,” Puri told businessline when asked about declining crude oil imports from Russia, India’s largest supplier of seaborne crude.
Citing instances, the Oil Minister pointed out that when he was a Joint Secretary on the Americas desk, many years ago, India did not import any energy from the US, but now it is buying about $20 billion worth of energy products.
Oil from Russia
Asked about India’s decision to begin importing crude oil from Russia in 2022, Puri said: “When the crisis took place, I happened to be the Petroleum & Natural Gas Minister. It was clear to us then, and even more clear to us now that we have to adopt a practical approach to the entire issue of energy sourcing.”
Practicality becomes even more necessary when the Indian economy is firing on all six cylinders because consumption of energy is not a reasonable, but a definitive indicator of whether the economy is doing well or not. If energy consumption slides, one can be reasonably sure that the economy has problems, he added.
“Turbulence in global markets is not a new phenomenon. I have studied that period from 1973, when the world first got what is called either an oil shock or a news shock related to oil. To understand what happens every 7-8 years, I was very pleased to see spikes and uncertainties have taken place earlier and they’ve had a major impact on the price as available to the consumer,” he explained.
Ukraine conflict
Elaborating on the energy crisis that engulfed the world on account of the Russia-Ukraine conflict, the Minister said there are some countries, which produce a lot of oil. They don’t consume very much because they have a small population base. There are large other countries who consume a lot of oil. Some of those consumers are both producers and consumers and some are just consumers.
“We find ourselves in a very interesting situation. Whilst all our targets say that we will become self-sufficient by a particular date, and I’ve no doubt that we will, in the interim we find ourselves dependent on imports of crude oil up to an extent of 80-85 per cent. Equally, on gas we find ourselves dependent on 55 per cent or so.,” Puri pointed out.
He further said “What have we done? We have diversified the sources of our supply. This has not happened now, it has happened over a period of time, and I want to give credit to everyone. From 27 sources, we now import from 39 sources.”
Highlighting that affordability is “always relative”, the Minister said: “I’ll give you a ballpark figure; gas prices globally went up by 303 per cent, but we were able to sustain (with) a marginal increase of 60 per cent or something. Petrol and diesel all over the world shot up in the last two years; (but) our prices have come down on petrol by 5 per cent. Our diesel prices came down by 0.28 per cent. Increases elsewhere have been 40 per cent, 50 per cent including in the G20 countries.”
India has to face the trilemma of availability, affordability and sustainability, he said, adding “I think the Modi government has done an outstanding job on being able to ensure all three. Availability means at no stage in my two years plus have I come across a situation where there’s a serious shortage of supplies anywhere. One particular day some pipeline somewhere something happens, but it’s corrected in a few hours. But not the kind of situation some of the other countries are facing where for the love of money you cannot access energy. There were some cases in our immediate neighbourhood in South Asia. So, availability is not an issue.”