The Indian government is set to take a major step to deal with the volatility in crude oil prices in the global market and the war-like situation. According to a report in Mint, the government is preparing to create two strategic petroleum reserves in Bikaner in Rajasthan and Baner in Madhya Pradesh to protect the country from a possible shortage of petrol and diesel. The price of crude oil has touched $120 per barrel due to the Iran war. Due to this, India’s crude oil import bill in the June quarter has increased by 26% compared to the previous year, while the import volume has decreased by 18%. India imports about 2 billion barrels of crude oil annually. For every $1 increase in oil prices, the country’s import bill increases by about Rs 18,000 crore.
According to a parliamentary standing committee informed by the Petroleum Ministry, the feasibility study for the facility in Bikaner, Rajasthan has been completed and is being finalised. While the pre-feasibility study has been completed for the project in Madhya Pradesh, a detailed feasibility study will now be carried out. India is the world’s third largest crude oil importer and imports about 88% of its oil requirements. An increase in import bill increases the cost of living in the country, which has a profound impact on economic growth and the value of the rupee.
India’s major oil suppliers:
Russia has once again emerged as India’s largest crude supplier in the first quarter of the current financial year. Russia’s share in total imports is over 40%. The United Arab Emirates (14.6%), Saudi Arabia (9.9%), Venezuela (5.2%) and Oman (4.5%) are the major suppliers.
