India may review fuel exports to protect domestic supply
NEW DELHI : India, the world’s fourth-largest refiner, will review its fuel exports if needed to ensure availability in the local markets, a government official said on Thursday, amid global disruption and soaring oil prices stemming from the Iran war.
“Domestic consumption is priority, and the government will review (the export plan),” Ms.Sujata Sharma, a joint secretary in the federal petroleum ministry told a news conference.
India has ordered oil and gas companies to share full details of exports, imports and inventories with a government agency, as the South Asian nation seeks to shield consumers from shortages.
India has designated the Petroleum Planning and Analysis Cell to compile the information and all companies must share information regardless of any confidentiality obligations.
India has been hit hard by the jump in crude prices and disruption in oil and gas supplies, but unlike China it has not moved to ban exports of refined fuels.
The data will help India in taking faster and “more targeted interventions such as imposing export restrictions or calibrating export flows to meet its own energy security”, said Prashant Vashisth, vice president at Moody’s affiliate ICRA.
He said India can use its excess refining capacity to prioritise fuel supply to friendly or strategically aligned countries after meeting its local demand.
“Nowadays buyers are willing to pay a higher price. The question is of availability, which is beginning to outweigh prices,” Vashisth said.
Any move to curtail fuel exports by India will hit Reliance Industries (RELI.NS), opens new tab, the operator of the world’s biggest refining complex, as other refiners have largely stopped exporting fuels.
All companies involved in the oil and gas supply chain including oil producers, importers, refiners, fuel and gas retailers, liquefied natural gas importers, pipeline operators, and petrochemical plants were ordered to provide PPAC with data.
India, the world’s third-biggest oil importer and consumer, meets over 90% of its oil needs through purchases from overseas.
So far the federal government has said there are adequate crude supplies and refined fuel stocks to meet local demand.
However, the world’s second-largest LPG importer is facing its worst cooking gas crisis in decades with shipments from the Strait of Hormuz almost halted due to the war.
India was sourcing more than 40% of its crude imports and 90% of its liquefied petroleum gas imports from the Middle East.
Indian refiners have bought millions of barrels of Russian oil floating on the high seas after Washington granted a sanctions waiver.
The country has invoked emergency powers ordering refiners to maximise production of LPG and cut sales to industry to avoid a shortage for its 333 million homes with LPG connections.
India last week asked consumers to avoid panic buying of LPG cylinders and shift to piped natural gas where possible.
Source : Reuters