The government is taking necessary steps to nullify the impact of soaring crude oil prices, the Parliament was informed on Monday. In a written reply, the Minister of State (MoS) for Petroleum and Natural Gas Rameswar Teli said, "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."
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.
The minister indicated that the country could release more ouk from national stocks if required. 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.
Earlier, Reuters reported that, to ease the import cost for companies, India is considering a Russian offer to sell its crude oil and other commodities at a discount.
Surging crude oil prices will likely push inflation much higher in the coming months. Following Russia's invasion of Ukraine, oil prices have skyrocketed. In March alone, they have surged about 35% - which will likely push up fuel, transport and other related components of inflation in March.
Petrol prices at fuel stations, where Indians will feel the effect from higher crude oil prices most acutely, have barely moved but are overdue a rise in coming weeks.
Recently, RBI deputy governor Michael Patra said the Central bank will have a relook at India's GDP growth and inflation projections in the upcoming monetary policy meeting.
Earlier, Union Finance Minister Nirmala Sitharaman had expressed concern over rising crude prices due to the Ukraine crisis and indicated that the central government is looking to tap alternative sources.
Noting that India imports more than 85% of its crude oil requirements, she said when oil prices go up, it is a matter of concern and "now we will have to see how it pans out". She pointed out that oil marketing companies fix pump prices based on 15-day average.
