New Delhi5 minutes ago
- copy link
Raj Kumar Dubey, director of oil company Bharat Petroleum, has said that if the global energy crisis continues like this, then another increase in the prices of petrol and diesel in the country is certain.
The prices of petrol and diesel have increased thrice in 9 days in India. Yesterday on 23rd May the prices were increased by an average of 90 paise per liter on 19th May. Earlier on May 15, the prices had increased by ₹3.
There is fluctuation in crude oil due to America-Iran war. Policy makers are now left with limited options to deal with this. According to Dubey, there are mainly three avenues open to the government and oil companies to deal with this crisis:
- First option: Increase the prices of fuel at petrol pumps.
- Second option – Oil companies themselves should bear this loss and let the losses increase.
- Third option- Government should provide funds to oil companies through financing.
America-Iran war caused damage to energy infrastructure
Dubey said that initially the increase in global prices by 20% to 50% was being considered temporary. But seeing the way the situation is changing now, it seems that this crisis is going to continue further.
He said that the energy infrastructure has suffered huge damage. It’s going to take a very long time to repair this infrastructure devastation. Looking at the current situation, if this situation continues, then another increase in fuel prices is absolutely certain. However, he did not clarify how much the total prices would be increased.
Oil coming to India from Russia and Africa
Dubey said that India has changed the sources of its oil supply. Now oil is coming from Russian oil, Africa and many other places through diversification. BPCL and other Indian energy companies have significantly expanded their sourcing. While earlier India had only 20 supply points, now this number has increased to 40.
The war started on 28 February, ceasefire took place in April
This dispute increased in the Middle East when on February 28, America and Israel together carried out major air strikes on Iran. In response, Iran also attacked American bases in Israel and Gulf countries. After this, in the beginning of April, both the countries agreed to a ceasefire and since then peace talks have been going on behind the scenes.
Crude oil prices increased due to closure of Hormuz Strait
Iran had closed Hormuz due to the war. This sea route is like a lifeline for the world. About 20% of the total oil supply globally passes through this route.
When the war started, crude oil was running at around $70 per barrel. By March the price rose to $120 per barrel. Then after the announcement of ceasefire, the prices fluctuated and came below $100. Currently Brent crude oil is around $103.
Source link
[ad_3]
