Indian Refining Companies Export Cut Plan: The impact of the uncertainty created in West Asia is now clearly visible. There has been a rise in the prices of crude oil for the last 3 days. Due to which the risk of economic pressure on oil importing countries is increasing.
At the same time, various reports are also pointing towards a strong rise in oil prices due to prolongation of the war. Let us know, what preparations are the Indian government and refining companies making to deal with this situation?
Discussion with refining companies
Amidst all this, the Indian government has started its preparations. In view of the possible shortage of crude oil, the government is making strategies with refining companies. Under which the government can ask companies to reduce exports and make it available in the domestic market.
Apart from this, there can also be talk of increasing the production of LPG. So that there is no shortage of energy needs in the country.
Prolonged war may increase prices
Apart from talks with refining companies, the government is also looking for other options. So that dependence on Iran and the Strait of Hormuz can be reduced. However, it is not necessary that there should be a big increase in retail fuel prices immediately. Because in such an environment, refining companies adopt a balanced policy.
Due to rise in global prices, companies suffer losses for some time and when prices fall, they compensate for the losses by earning profits. However, due to prolonged war and prolonged disruption of supply, prices rise.
The country is dependent for energy needs
A large part of the country’s energy requirements depend on imports. About 90 percent of the demand for crude oil is met through imports. At the same time, about 60 to 65 percent of the requirement of LPG and about 60 percent of the consumption of LNG is also imported from outside.
Most of these supplies arrive from West Asia and most of the consignments pass through the Strait of Hormuz. Due to war like circumstances the supply may be completely disrupted. Due to which the possibility of a major energy crisis cannot be ruled out.
Also read: If the crisis on the Strait of Hormuz deepens, crude oil will become expensive, reports S&P Global; Will the price cross $100?
