Indian retail fuel prices are stable despite a surge in the oil basket price to over $155 per barrel, the Hindustan Times reported today, citing energy industry executives.
The Indian oil basket settled at $156.29 per barrel on March 19, overtaking Brent crude in a rare occurrence resulting from the supply disruption in the Middle East. That’s despite Iran’s statement that it would allow Indian tankers carrying oil for the subcontinent to pass through the Strait of Hormuz. As a result of the disruption, the Indian oil basket has surged by some 120%.
The surge is currently being absorbed by refiners, both state-owned and private, industry executives said on Sunday, as quoted by the Hindustan Times. They also said there is plenty of oil in stock, so a supply crunch is not on the horizon for the time being.
The oil ministry, meanwhile, issued a statement saying “In view of the evolving situation in West Asia, the Government of India continues to take proactive steps to ensure preparedness and response across critical sectors,” adding that “All refineries are operating at high capacity, with adequate crude inventories in place. The country is also maintaining sufficient stocks of petrol and diesel.”
India is the third-largest importer of crude oil globally, behind China and the United States. It relies on imports to cover over 80% of demand. However, it has a highly diversified supplier base, the Hindustan Times noted in its report, counting “40 oil-rich countries” among its sources. However, the country is still exposed to international oil prices since its oil basket is comprised of Oman and Dubai sour crude plus sweet Brent. The Dubai/Oman benchmark contract ended last week at over $160 per barrel. Brent was trading at $113 per barrel at the time of writing, as the ultimatum that President Trump gave Iran before he starts bombing power plants nears its deadline.
By Charles Kennedy for Oilprice.com
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