New Delhi: India is well prepared to handle global energy disruptions and is not facing any oil crisis despite tensions linked to the Iran conflict, thanks to strong reserves and diversified imports, a senior government official said on Thursday.
According to the official, India has built strong energy security by maintaining strategic oil reserves and sourcing crude from more than 40 supplier countries, enabling it to absorb global shocks more effectively.
The country also has robust macroeconomic fundamentals, including substantial foreign exchange reserves that can cover 11–12 months of imports. These reserves are also sufficient to cover the nation’s oil import bills for nearly five years.
India’s strategic stocks of crude oil and petroleum products are estimated to cover over 70 days of market demand, while diversified imports have significantly reduced dependence on the Middle East.
With a 74-day reserve buffer, diversified sourcing and proactive regulatory measures, India is better placed than many regional peers to deal with the current global energy shock.
The official said the government’s approach reflects a multi-alignment economic strategy, which includes purchasing discounted crude from Russia, invoking the Essential Commodities Act when required, and expanding supply sources without compromising national interests.
The crisis, the official noted, is expected to affect economic growth more than inflation, allowing policymakers to maintain macroeconomic stability. Both the government and the Reserve Bank of India still have room to respond if needed.
India’s inflation rate of around 2.75 per cent is among the lowest among major economies. Imports of discounted Russian crude, flexible fuel taxation and regulated LPG pricing have helped keep fuel prices relatively stable for consumers.
In contrast, countries such as Japan depend heavily on crude shipments passing through the Strait of Hormuz — to the extent of 75 to 90 per cent of their supplies.
India has reduced its dependence on oil passing through the Strait of Hormuz from about 50 per cent earlier to roughly 20 per cent now by diversifying import sources.
The country continues to buy discounted crude from Russia, which currently accounts for around one-third of India’s total oil imports. Other major suppliers include Iraq, Saudi Arabia, United Arab Emirates and the United States.
Meanwhile, neighbouring countries are facing greater pressure. Nations such as Pakistan, Bangladesh and Sri Lanka reportedly have fuel reserves for 30 days or less.
Pakistan has already raised petrol and diesel prices by about Rs 55 per litre, while Sri Lanka has also increased fuel prices amid panic buying. Bangladesh, meanwhile, has been forced to introduce energy rationing in response to supply concerns.
With inputs from IANS