India till now is on a firm track of sourcing oil cheaply from Russia since the latters invasion on Ukraine.
This is against the wishes of the western powers who want to being down the Russian economy by curbing its oil revenue.
Nevertheless, the Indian Government has categorically said that it would source what it needs from where the price is advantageous.
The Government also said its three oil marketing companies are not buying crude from Russia. However, the private companies are the only ones who are buying, refining and shipping out.
According to media reports, India’s exports of petroleum products shot up to USD 78.58 billion time period April 2022 to January 2023. This went from USD 50.77 billion shipped out during the previous year’s corresponding period.
Stoked up by the imports of crude oil India’s imports from Russia went up about 384 percent to USD 37.31 billion during April 2022-January 2023. As a consequence, Russia became India’s fourth largest import partner up from 18th position in 2021-22.
The increasing oil imports from Russia has made it easy for India by preventing it from paying for the products in Rupees.
Shweta Patodia, AVP, Analyst, Moody’s Investors Service said, “Crude oil and international fuel prices have surged following the Russia-Ukraine war. Net realized prices for the oil marketing companies in India, however, have not increased at the same pace which has resulted in significant marketing losses for them.
While the marketing losses were steep in the first half of the fiscal year, it has narrowed since then.”
After the Russian announced about cutting down oil production following the price cap, Patodia said, “Reduction in oil production from Russia, if not met by a corresponding increase in production from other producers or demand moderation, will reduce the overall supply relative to demand and may strengthen the crude oil prices.”
According to a recent credit rating report by ICRA on Oil and Natural Gas Corporation Limited (ONGC), the latter’s subsidiary OVL’s assets in Russia were impacted due to geopolitical issues and normal operations in these are expected to resume shortly.
