Ex-BPCL Director Raj Kumar Dubey said India’s diversified crude sourcing from 41 nations, strategic reserves, and timely government intervention helped it withstand the Strait of Hormuz crisis without major fuel shortages or sharp price hikes.
Diversified Sourcing and Strategic Reserves Avert Crisis
Former Director (HR) of Bharat Petroleum Corporation Limited (BPCL), Raj Kumar Dubey, said India’s diversified crude sourcing strategy, strategic petroleum reserves and coordinated government response helped the country withstand disruptions arising from the Strait of Hormuz crisis without major fuel shortages or sharp price hikes.
Speaking to ANI, Dubey said India’s long-term planning enabled it to quickly respond to supply disruptions by turning to alternative crude suppliers. “Long-term planning is very important. Previously, you had 20 sources; you used to take crude from 20 countries. This has changed in the last 7-8 years, from 20 countries we are today taking crude from 41 countries,” he said.
“So, as soon as the Hormuz Strait was closed, we immediately started talking and negotiating with other countries, as we already have a relationship with them. We again negotiated with them for crude supplies from Russia, the Atlantic side and Western Africa. This was the main reason that you maintained supplies, and some of the shortages were met from our strategic reserves. That’s why we didn’t let crude decrease. Refineries worked at full capacity,” he added.
Government Intervention Stabilised Fuel Prices
Dubey said India avoided the fuel shortages and rationing witnessed in several countries because of planning and timely government intervention. “When this crisis started, it was known that it would be a big problem as more than 85 per cent of our crude is being imported and through Hormuz, 40-50 per cent of your imports are there. So, if the direction is clear from the top that this will not go on for too long, then if we increase the price, the whole country will have to suffer from the inflationary trend,” he said.
“First, oil marketing companies absorbed some of the impact. Then the Government said petroleum companies cannot bear more than this. So, the Government took it upon itself. I think the Government has absorbed more than Rs 1.7 lakh crore in excise duty loss so that this price rise does not happen,” Dubey added.
Containing Inflationary Pressures
He said the government’s intervention helped keep inflation lower than in many other countries despite India’s dependence on imported crude. “Countries like America, which is one of the largest producers of oil, saw diesel prices increase by 25 to 30 per cent. Oil-importing countries where imports are more than 50 per cent saw more than a 60 per cent increase. Here it was only around 7 to 8 per cent because the Government absorbed many things themselves so that inflation doesn’t increase,” he said.
Future Preparedness and Energy Transition
On future preparedness, Dubey stressed the need to accelerate the transition towards renewable energy, expand natural gas usage and boost domestic production of Compressed Biogas (CBG). “We have to work more rapidly on the direction given by the Prime Minister. We have to widen our supplies and find more sources. Gas market share should be 15 per cent in our energy basket. Till now, we have only around 7 per cent. The renewed emphasis is on CBG because it can be produced on a large scale at the local level, it benefits farmers and reduces imports,” he said.
Role of Diplomacy and Clear Policy
Highlighting the government’s role during the crisis, Dubey credited clear policy direction and strong diplomatic engagement for ensuring uninterrupted energy supplies. “If there is clarity of thought at the top level, then the result is like this. Once that clarity came, it became very easy for those implementing it because their full force was on implementation,” he said.
“Oil marketing companies cannot manage supplies from outside without diplomatic channels. Our friendship with different countries helped a lot. This coordination and understanding of how important diplomacy is for energy security helped significantly,” Dubey added. (ANI)
(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)