Abhishek Vij
While developing countries in the third world, like India, believed they would shift their economy from import-based to export-based. They would grow rapidly, and by 2047, the centenary of India’s independence, India would be fully developed.
Furthermore, on the strength of its growth rate, it would surpass the United States and China to become the world’s number one economic superpower. However, the ongoing war between the United States, Israel, and Iran has emerged as a major challenge for India. Adequate energy supplies are crucial to sustain India’s investment and production. Furthermore, exports should be significantly higher than imports so that the exchange rate of the Indian rupee does not decline and India does not have to beg for industrial and trade assistance from rich countries.
However, the current situation seems to have changed due to the war. Globally, crude oil prices, which were $70 per barrel when the war began, have now risen to $100 per barrel. According to economists, a $10 per barrel increase in crude oil prices increases inflation by 30 basis points. So far, India has contained the expected surge in petrol and diesel prices, but for how long? With the US allowing the purchase of crude oil from Russia and other external sources for a month, India can prevent petrol and diesel prices from spiraling for 74 days. However, the immediate impact of the war is that the price of domestic and commercial gas cylinders has increased.
This will not only strain household budgets but will also increase the cost of food in places that use commercial gas. The question is why gas imports could not be increased even after the permission to purchase crude oil from Russia was granted. This is because transporting gas requires different types of containers and unloading ports, which cannot be built immediately. Now, the country is already facing a domestic and commercial gas crisis. To prevent a shortage of crude oil in the country, crude oil purchases have been initiated from the United States, Africa, and Russia.
Due to the disruption in oil supplies, Indian refiners were forced to shut down some of their units. Russia has even stated that India can buy as much crude oil as it wants from it, but it will not release oil sales figures. There is also news that, following the decision to import crude oil from alternative sources, the country’s refineries have been allowed to restart their closed units.
But remember, this turmoil takes time to settle down, and those who seek to profit from the psychological fear of scarcity do not hesitate to spread rumors. Recently, long queues of vehicles were seen at petrol pumps in European countries, and crowds gathered as if there would be no oil tomorrow. However, in India, Bharat Petroleum has said to avoid rumors, saying the country has no shortage of oil reserves. But the common man is worried, wondering how long will the country’s petroleum companies be able to avoid these black marketers and keep oil prices under control?