Thursday, Jul 07, 2022

How Modi Govt Is Using Russian Oil Imports To Silence Opposition

It's over a week that the assembly elections are over but there has not been any major fuel price hike announced in the country so far.

Photo by AP/PTI

"Get your petrol tanks full immediately," Rahul Gandhi had exhorted people as the Modi government’s “election offer is coming to an end”.

Earlier this week, Opposition parties in Rajya Sabha demanded to know if fuel prices will be hiked, now that assembly elections were over.

There was speculation that fuel prices could go up to Rs 15-22 per litre after March 7, the last date of voting in the just-concluded assembly elections, as crude oil prices touched a record high of $130 per barrel amid the Russia-Ukraine crisis, along with high demand.

However, it's over a week that the assembly elections are over but there has not been any major fuel price hike announced in the country so far.

By not succumbing to the pressure from the West, and announcing its intentions to buy oil from Russia at cheaper rates, and with no major fuel price hike, the government has silenced the opposition.

India is highly dependent on imports for meeting its energy requirements as nearly 85 per cent of its crude oil requirement (five million barrels a day) has to be imported. So, India’s stand is clear:  Being a major importer, it needs the oil from Russia; it does not have the luxuries of the West.

The Petrol and diesel prices have not been revised since November 4, when the Centre cut excise duty on petrol and diesel by Rs 5 and Rs 10 a litre, respectively, when crude was at $83/barrel.

The crude tumbled below $100 per barrel on Tuesday, easing the need to sharply raise pump rates or cut taxes.

Amid all this, reports were doing rounds that India is considering buying Russian oil at discounted rates.

The Indian Oil Corporation reportedly bought three million (30 lakh) barrels of Russian crude oil last week at a discounted price.

India has held to its neutral stance on the Russia-Ukraine war despite pressure from the US-Europe alliance to condemn the Russian invasion.

On Friday, India hit back at western countries amid disquiet among them over New Delhi's indication of buying Russian oil at cheaper rates, saying legitimate energy transactions should not be politicised.

India has to keep focussing on competitive energy sources and it welcomes offers from all oil producers as geopolitical developments have posed significant challenges to the country's energy security, reports quoted government sources as saying on Friday.

'Number of countries importing oil'

The sudden hike in crude oil prices following the Russia-Ukraine conflict has added to India's challenges. The government did not rule out buying discounted crude oil from Russia.

"Russian oil and gas is being procured by various countries across the world, particularly in Europe," a PTI report quoted sources as saying.

They said 75 per cent of Russia's total natural gas exports is to the member countries of the OECD (Organisation for Economic Co-operation and Development) in Europe such as Germany, Italy and France.

Countries like the Netherlands, Italy, Poland, Finland, Lithuania and Romania are also large importers of Russian crude oil.

"Let me just highlight that a number of countries are doing so, especially in Europe, and for the moment, I will leave it at that. We are a major oil importer and we are looking at all options at all points. We need the energy," Ministry of External Affairs (MEA) Spokesperson Arindam Bagchi said on Friday.