Crude oil prices have soared past $100, raising fears of inflation and a fuel crisis from the US to Japan. However, petrol-diesel prices in India are currently stable. There are three major reasons behind this, which are protecting the country from global shocks. Despite crude crossing $100, prices in India remained stable as a result of a strong strategy.
Petrol prices have seen a sharp jump in the world's top economies since the outbreak of war in West Asia, with crude oil crossing $100. Second, while prices in the US have risen by around 20%, Canada and Italy have seen increases of 15-25%. European countries such as Germany, France and the UK have seen increases of 10-15%, while prices in Japan, China and South Korea have risen by 8-11% despite government controls. In contrast, India has been the only country where petrol-diesel prices have remained almost stable. This reflects India's strong supply strategy, cheap imports and price management of OMCs.
Many countries in the world are facing fuel crisis due to tensions in West Asia and supply disruptions but India has kept the situation under control due to the preparations made in advance. This is the reason why, while other countries are witnessing a steep rise in prices, the impact in India has been limited.
Regarding the first reason, India has the capacity to meet the demand for approximately 70 to 74 days through the 'Strategic Petroleum Reserve' and stocks of oil marketing companies. This strong stock (buffer) helps withstand sudden supply disruptions and prevents immediate price pressures.
Another reason is that India has bought crude oil from Russia at a huge discount over the past few years. This has helped companies keep their costs down and use the excess profits as a 'buffer'. This is the reason, despite the increase in international prices, prices in the domestic market have not seen a rise.
The third reason is that India's oil marketing companies (OMCs) do not immediately pass on international price increases to consumers. In this case, when oil was cheap, the profit (margin) that was earned, is now used in expensive times, so that consumers do not feel a big shock. This 'shock absorber' model differentiates India from other countries.
Even with crude oil crossing $100 and in the midst of a global crisis, the government has handled the situation very smartly with pre-planned strategies. This strategy mainly consists of keeping 70 days of buffer stock through 'Strategic Petroleum Reserve', reducing costs by buying oil from Russia at a discount and using Oil Marketing Companies (OMCs) as 'shock absorbers'. Due to this, the direct impact of international prices did not reach the common consumers and the prices of petrol-diesel in the domestic market could be kept stable.
Also, when crude oil was very cheap, the government increased its revenue by increasing the excise duty and now that crude has become expensive, the government has reduced the excise duty. Due to this sound strategy, oil companies are easily bearing the burden of increased crude prices and the general public has also got a big relief.
Iran Israel Us War Breaking : What is Bab el-Mandeb? If Iran shuts it down, the world will crave oil and gas, a threat to America!
. Source
