Middle East Crisis: Petrol and diesel rates steady despite expensive crude imports, OMCs face under-recoveries, says Indian govt

US-Israel-Iran War Impact: In an inter-ministerial briefing on Wednesday, government officials said that the country has secured crude sufficient supplies for the next two months. Noting that OMCs are facing under-recoveries on petrol and diesel, they assured the public that consumers remain the government's top priority, stating that the retail prices of both fuels have not been increased despite expensive crude imports. The latest remarks come at a time when India is battling disruptions in energy supplies from the Middle East, where a war between US-backed Israel and Iran is in its second month. Investors have pinned hopes on negotiations between Iran and the US, but experts say that disruptions could rise this month due to ​the prolonged closure of the ​Strait of Hormuz.

Last month, India ramped up its energy production, with refineries running at full capacity, and diversified its imports to ensure adequate supplies for the consumer, prioritising supplies to households and essential services.

Meanwhile, domestic fuel retailers raised commercial LPG and aviation turbine fuel (ATF) rates earlier in the day following a sharp spike in ​global benchmarks due to the West Asia war. India -- the world's second-largest ‌LPG importer -- is enduring its worst gas crisis in decades, with officials cutting supplies for industries to shield households from cooking gas shortages.

West Asia Crisis | Adequate crude oil stockpiles available, refineries continue to operate at full capacity, says Indian govt

Here are highlights of what the government spokerspersons said at the April 1 briefing:

• Adequate crude stock available
• Refineries operating at full capacity
• No dry-out reported at retail outlets
• Crude oil supply secured for the next two months
• Petrol and diesel prices not increased despite expensive crude
• OMCs are facing under-recoveries on petrol and diesel
• Discounts being offered on ATF

Don't panic-book, don't panic-buy, reiterates govt

• No need for panic booking or buying
• Efforts underway to expand the PNG network
• Supply to 3 lakh consumers; 3.5 lakh new applications received
• LNG and LPG prices have risen 44% in international markets
• OMCs likely to face losses
• 92% bookings are online
• 81% deliveries are through DAC
• 60 lakh cylinders were delivered on Tuesday
• 65,000 5kg cylinders sold yesterday

'States urged to act against misleading news and rumours'

• Urged states to act against misleading news and rumours
• Advised people not to engage in panic buying
• ATF prices have increased by 25 per cent amid expectations of a sharper rise
• ATF prices will remain lower for domestic routes
• ATF is deregulated
• Partial relief has been provided amid rising prices
• Relief for airlines on domestic routes
• Full pricing applicable for international routes
• The situation remains uncertain going forward
• The gap is wider due to differences in international benchmarks for petrol and diesel
• This step is expected to support airlines and help keep airfares under control
• The government’s priority is to keep air travel accessible

Shipping

• All Indian ships and citizens are safe
• 18 Indian vessels with 385 sailors are in the western Persian Gulf
• Operations at all ports are normal, with no congestion
• Continuous coordination with MEA, missions, and other stakeholders
• Ensuring the safety of all Indian citizens is the top priority
• Assistance is being provided through helplines and missions
• Continuous contact with local administrations
• Efforts underway to evacuate people via road routes where airspace is closed

Meanwhile, the government is constantly monitoring the situation and taking measures to ensure minimum impact on the consumer. This week, the Centre permitted 21 kerosene-free states and Union Territories to sell limited supplies of the commodity as backup fuel in light of the evolving situation in West Asia. The move is viewed as a last-mile distribution backup to ensure that the public gets cooking fuel alternatives through the Public Distribution System (PDS).

Under this arrangement, service stations of state-run oil marketing companies IOCL, HPCL and BPCL will store up to 5,000 litres of the fuel in underground tanks.

The distribution of this alternative fuel will be only for sales for the purposes of cooking and lighting only. Using the fuel for other means is not allowed.

What makes the Strait of Hormuz crucial?

Many analysts have expressed concerns over the prolonged blockage of the Strait of Hormuz.

This crucial maritime region -- connecting the Persian Gulf with the Gulf of Oman and the Arabian Sea -- normally enables the supply of one-fifth of the world's oil and gas.

Its blockade is reportedly causing severe global energy shortages and price surges.

FAQs related to the article

Q1 Is there any fuel shortage?

No. The Indian government has repeatedly said that crude stocks are adequate and refineries are running at full capacity.

Q2 Are there petroleum product shortages in India?

No. Government spokespersons have assured the public that retail outlets are fully supplied, with no dry-out reported.

Q3 Is supply secure going ahead?

Yes.

Q4 How many days of crude oil supplies does India have?

Officials say that the country has two months of crude oil supplies.

Q5 Why haven’t petrol and diesel prices risen?

OMCs are absorbing the impact of higher international prices, without passing them on to petrol and diesel consumers.

Q6 Should consumers panic-buy?

No. Authorities have repeatedly and clearly advised against panic booking or buying.

Q7 What’s happening with LPG and PNG?

Global LNG and LPG prices are up 44 per cent, impacting costs. PNG expansion continues to gather steam, with 3 lakh consumers served and 3.5 lakh applications pending, according to official data.

Q8 Are operations and citizens safe?

Yes. Ports are functioning normally, Indian vessels and citizens are safe, and evacuation support continues where needed, according to government spokerspersons.