Crude oil on bouncy wicket: Govt says rising price a matter of anxiety

Crude oil’s climb towards $90 per barrel is a matter of anxiety for India, said Pankaj Jain, secretary, petroleum and natural gas ministry. “Whenever prices go up, it does cause anxiety and concern,” Jain said on Wednesday.

The price of Brent, the international crude benchmark, has increased $15 per barrel in about four months to $89 per barrel. “Does it stop at $90? That’s the matter of anxiety,” he said.

India is the third-largest importer of crude oil in the world and ships in 88% of its requirements.

The impact of high prices can be gauged only if they are sustained for long, Jain said.

The secretary added that if prices stay this way for a month or longer, companies will respond appropriately. Geopolitics and traditional summer demand were driving up prices, he said.

An Israeli attack on the Iran embassy in Syria on Monday, which killed some senior Iranian military officers, is threatening to widen the conflict in West Asia.

Fuel prices get a boost during summer, helped by increased holiday travel and air-conditioning demand. “Either crude prices go up or cracks go up (in summer). This year so far, crude prices have gone up, cracks haven’t gone up,” Jain said.

Refiners are expected to regularly align domestic prices of fuel with international rates. After extreme volatility hit the global oil markets in 2022, state oil companies stopped regular revision of prices. They have recently cut retail prices of petrol and diesel by Rs 2 per litre each.