Petrol And Diesel Prices Could Climb Again — Thanks To Russia

Petrol and diesel prices in India could be set to soar as Russia reportedly considers imposing quotas on exports of oil products.

What Happened? Russian Deputy Prime Minister Alexander Novak said a proposal to impose quotas is being considered, along with other options, local media outlet RIA news agency reported. Such a move could result in uncertainties for India’s fuel market, which has stepped up the import of Russian oil in recent times.

Russia aims to cut its crude exports by 2.1 million tonnes in the third quarter, in keeping with its pledge to cut overseas shipments by 500,000 barrels a day. Russia and Saudi Arabia have been slashing crude output recently, which has led to prices reaching all-time highs.

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Why It Matters? India’s refiners could face higher costs for importing oil if Russia implements the quotas. This could translate to higher petrol and diesel prices for the common man unless the government intervenes.

In June, India purchased 60% of all Russian Urals oil exports, as the country looked to cash in on deep discounts that Russia was offering on imports. However, those discounts are drying up and the country is now reportedly exploring alternatives in the Middle East to meet its energy needs.

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India’s policymakers will need to closely monitor the developments as any changes in Russia’s export policies could impact India’s energy sector and its retail fuel prices.

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Posted In: Macro Economic EventsCommoditiesEconomicsMarketsoil pricesRussia