Page 46 - The Indian EYE 041522

BUSINESS EYE APRIL 15, 2022 | The Indian Eye 46

India says it stabilizing ties

with russia as economy faces oil

and gas challenges

India, the world’s third largest oil importer, says it is examining ways to release

crude from its national inventory to calm rising global prices

OUR BUREAU hood by Rs 2.50 per kg, the second
increase in as many days, because of
New Delhi
a two-fold rise in the price of domes-
ndia is focused on stabilising its tic natural gas. The latest increase
economic ties with Russia and has made CNG costlier by more than
Iis working to devise a payment Rs 9 per kg in six days, which is ex-
mechanism to settle trade amid pected to set off a clamor for higher
Western sanctions against Moscow fares from bus, auto, taxi and goods
for its invasion of Ukraine, the for- transport operators.
eign ministry said on Thursday. India Costlier CNG in NCR could
has called for an end to violence in also impact the prices of daily sta-
Ukraine but refrained from outright ples, especially vegetables as these
condemnation of Russia, with which are brought in from Delhi’s neigh-
it has long-standing political and se- borhood and distributed in the city in
curity ties. CNG vehicles.
The sharp rise in domestic gas
“we have an etablished econom- price -- from $2.9 to $6.10 per unit
(million British thermal unit) -- in
ic relation with russia. given Congress Party supporters stage a demonstration against the Central Government over accordance with the Centre’s 2014

the current circumstance post the hike in the prices of fuel and LPG cylinders in front of Indian Oil Bhawan, Eastern Regional pricing formula has also forced CNG
and PNG operators in cities such as
office, in Kolkata (ANI)
development in ukraine, I think Mumbai and Gujarat to jack up re-
there is an effort by both sides ordered at least 16 million barrels of the United States contributing half, tail prices.
in a bid to cool oil prices after Rus-
Further increase in prices can-
cheaper Russian oil, similar to pur-
to ensure that this economic chases for the whole of 2021, accord- sia’s invasion of Ukraine. not be ruled out. People aware of
India joined other major con-
relationship remains stable,” ing to Reuters calculations. During sumers to release 5 million barrels the matter said there is still a gap
of about Rs 7-8 per kg between the
a visit to New Delhi at the end of
ministry spokesperson arindam March, a top US official said the of oil from its strategic petroleum retail price of CNG and IGL’s cost
Bagchi told a news conference. United States did not want to see a reserves in November to contain in- of natural gas, the raw material for
“rapid acceleration” in India’s oil im- flationary pressures. The minister of CNG and PNG (piped natural gas)
ports from Russia. state for finance had said last month services. The gap for PNG is estimat-
“It is not talking about increas- Meanwhile, India, the world’s the government was “committed to ed at Rs 3-4 on each unit (standard
ing...it is about stabilising it because third largest oil importer, said on supporting initiatives for releases cubic meters). But all agreed that it
this (economic) relationship exists Thursday it was examining ways to from strategic petroleum reserves.” will be impossible for IGL to pass on
and it’s in our interest to make sure support decisions by the Internation- Oil futures fell sharply on the entire burden to consumers. This
some of this economic activity con- al Energy Agency (IEA) member Wednesday after large consuming will put IGL in a piquant situation be-
tinues, and we are trying to see how countries to release crude from their nations said they would release oil cause of a sharp uptick in CNG sales.
we can keep that stable,” Bagchi said. national inventories to calm rising from reserves to counter tightening Currently, domestic gas covers
Before the Ukraine war, Indian global prices. “In the interest of col- supply, pushing crude futures to their 70-80% of IGL’s CNG sales. The
refiners rarely bought Russian oil laborating with likeminded countries lowest closing levels in three weeks. company is meeting additional de-
due to high freight costs. Western on these positive initiatives, govern- Crude continued its fall on mand with imported gas from the
sanctions have seen many importers ment of India is examining what it Thursday amid uncertainty that the spot market. This can cost anywhere
shunning trade with Moscow, de- can do to support these actions,” the Eurozone will be able to effectively between 3-4 times the domestic sup-
pressing its crude prices to record energy hungry nation said, without sanction Russian energy exports. plies, especially since international
discount levels, which prompted In- elaborating. In a related development, In- prices have gone up by near-40%
dian companies to step in. The IEA on Wednesday said its draprastha Gas Ltd (IGL) raised due to the Russia-Ukraine conflict.
Since Russia invaded Ukraine member countries had agreed to re- CNG (compressed natural gas) pric- As demand rises further, the squeeze
on February 24, Indian refiners have lease 120 million barrels of oil, with es in the Capital and its neighbor- will get harder for IGL.

www.TheIndianEYE.com