India Left With Fewer Options Amid Surge In Global Oil Prices

India imports 85% of crude oil & about half of its natural gas requirement

NEW DELHI: As the world’s third-largest oil importer and consumer, India is running out of options as the relentless surge in international oil prices make it imperative to pass them on to consumers, officials said Monday.

India imports 85 per cent of its crude oil needs and about half of its natural gas requirement. While the imported crude oil is turned into fuels such as petrol and diesel, gas is used as CNG in automobiles and fuel in factories.

“International crude oil prices continue to remain high, providing no respite to major oil importers such as India. (International benchmark) Brent oil future was quoting over $79 per barrel today. A month back it was less than $72,” a top government official involved in the decision making said.

This spurt has squeezed margins and forced passing on to the increase to consumers in form of a hike in petrol and diesel prices.

“With international crude oil prices moving in both directions during July and August, no price increase was carried out by oil marketing companies (OMCs) from July 18 to September 23. Instead, a total decrease of Rs 0.65 a litre on petrol and Rs 1.25 per litre on diesel was carried out during that period.

“However, with no respite from surging international prices, OMCs have started to of petrol and diesel with effect from September 28 and September 24 respectively,” the official said. While prices were unchanged on Monday, rates have gone up by Rs 2.15 paise per litre in the case of diesel since September 24. Petrol price has increased by Rs 1.25 per litre in one week.