After the Lok Sabha elections, prices of petrol and diesel may go up due to inflation. In fact, the US has decided not to extend the period of exemption to other countries, including India, to import crude oil from Iran.
After this decision, crude oil prices have risen 3% in the international market, which is the highest level of 6 months. The trend of price rise in crude oil prices is likely to continue further. Due to this, the prices of petrol and diesel may increase in the coming days.
Petrol was at the Highest Level in 2018
When the crude oil futures price was at $ 80 a barrel in September, at that time, prices of petrol were Rs 95 per liter in many metros including Mumbai. Currently, crude oil futures have gone above $ 74.
Options with India
Optional sources can be used by India for countries like Saudi Arabia, Kuwait, United Arab Emirates (UAE) and Mexico to compensate for the shortfall in crude oil supply. However, India may have to pay a lot of money to import crude oil from these countries. Apart from this, in the meeting at the end of this month, India can pressurize the US government to extend the exemption limit beyond May 2.
Let us explain to you that India, after importing Iran's crude oil after China, is the second largest buyer. Considering the data, India buys 10 percent of its oil from Iran. Although after the US ban, there has been a slight reduction in import of oil from Iran in 2018-19, but it is still about 20 million tonnes annually.
Government of India's Preparations
However, Petroleum Minister Dharmendra Pradhan in the Indian government says that a strong plan has been prepared for an adequate supply of crude oil to Indian refineries. He said that additional supplies would be made from other major oil-producing countries.
What is Indian Oil Saying?
Indian Oil Corporation Chairman Sanjeev Singh told that oil refinery companies import crude oil from many sources and have been preparing for alternative supply sources since last months. He also admitted that prices of crude oil can go up temporarily by the US decision.
Let us tell you that Indian Oil has the option of taking 7 million tonnes of additional crude oil over 7 lakh tons of fixed purchase from Mexico during the year. Similarly, over 2.5 million tonnes of crude oil can be taken from Saudi Arabia over the term contract of 56 lakh tonnes. While there is an option to take 1.5 million tonnes from Kuwait and 1 million tonnes of crude oil from the United Arab Emirates.
Why did the US ban
Actually, the US had been out of the country last year with the agreement with Iran in 2015 on the nuclear issue. President Donald Trump separates the United States from the nuclear deal and again banned Iran. However, the US exempted China, India, Japan, South Korea, Taiwan, Turkey, Italy and Greece from the ban for 6 months. Along with this, all these countries were also asked to cut the crude oil imported from Iran. This rebate was started in November 2018 and ends on May 2.
