Bharat Petroleum Corporation Limited (BPCL) Director HR Raj Kumar Dubey said a further increase in petrol and diesel prices may become inevitable if the ongoing global energy disruptions continue.Speaking about the pressure on fuel retailers amid rising crude oil prices, Dubey said policymakers currently have limited options to deal with the situation.He added, according to what was reported by the ANI news agency, “Now, there are two or three options open. The first is to raise prices, or for the rise to be clear at gasoline stations there, or for the oil companies to bear the losses and compensate for more and more losses. The third is government funds through financing the deficit.”
Dube noted that increases in crude oil prices of 20% to 50% were initially considered temporary, but warned that the turmoil could last longer.“The way things are going, I think this will continue,” he said, noting the destruction of energy infrastructure due to the ongoing conflict in West Asia.“So under this current scenario, if this scenario continues, I think there should be another rise in prices,” he added.
Fuel price hikes are already underway
His comments come days after state-run oil companies raised gasoline and diesel prices for the third time this month.Gasoline and diesel prices rose by about 90 piasters per liter on Saturday, as oil marketing companies tried to offset mounting losses caused by crude oil prices remaining above $100 per barrel.With the latest revision, petrol price in Delhi is now Rs 99.51 per liter while diesel price is Rs 92.49 per litre.Oil companies are still facing a recovery shortfall of around Rs 13 per liter for petrol and Rs 38 per liter for diesel despite the recent increases.Retail fuel prices remained under pressure after global crude prices rose more than 50% since the start of the Iran war in February, disrupting energy flows through the Strait of Hormuz.
India diversifies its sources of oil supply
Dubey said India has managed to avoid fuel shortages by diversifying oil imports despite the unrest around the Strait of Hormuz.He said, “With more than two million barrels of oil stuck in the Strait of Hormuz, managing this is possible only by diversifying the sources of supply. Whether it is Russian oil or whether it is from Africa or from many other places.”He added that Indian energy companies have significantly expanded their sourcing network.“Previously, we had only 20 supply points. From 20, we have moved to 40 supply points now, which also includes Russia,” Dube said.“To this extent, the various supply lines provide us with sufficient security,” he added, noting that India’s fuel consumption increased even during the period of conflict without causing a shortage.India has increasingly relied on Russian crude and alternative suppliers such as Venezuela, Brazil and African producers to compensate for weak Middle East supplies amid the disruption of trade routes linked to the Strait of Hormuz.
Push for green energy
Dubey also said that the crisis is expected to accelerate India’s shift towards clean energy sources.“With more than 200 gigawatts of solar installed, the momentum will increase now because the kind of foreign exchange problems that the energy import bill brings, I think it will definitely accelerate towards green energy options,” he said.He highlighted the government’s drive to increase the proportion of natural gas to 15% of India’s energy mix from 7% to 8% currently, besides focusing more on compressed biogas and blending of ethanol and hydrogen fuel.Dube described the ethanol blending program as a “very proactive stance” and said the initiative helped avoid additional gasoline shortages and pressure on foreign exchange reserves.He added: “Accelerating our efforts towards using hydrogen as a fuel, as a very sustainable fuel for the future… these are some of the things we need to do.”