If the temporary exemption given by America to India to buy cheaper crude oil from Russia is not extended, it may have a direct impact on the country’s energy supply and oil import policy. This exemption expires on May 16, and there is no clear indication yet regarding its renewal.
Till now, due to this exemption, India was importing large quantities of crude oil from Russia at concessional rates. Due to this, the country was getting relatively cheaper crude oil compared to the international market, which also benefited the refinery companies and domestic energy prices.
🛢️ Fear of stoppage of cheap oil
If this exemption is not extended further, India may have to buy expensive crude oil from alternative markets. This is likely to increase the import bill and will have a direct impact on the costs of oil companies.
Energy experts believe that in case of cessation of cheap oil from Russia, India will have to increase supplies from the Middle East and other countries, where prices may be relatively high and unstable.
⛽ Pressure on fuel prices possible
According to experts, if the procurement cost of crude oil increases, its effect may gradually be visible on the prices of petrol and diesel as well. However, measures like taxes and subsidies can also be considered by the government to keep prices stable.
🌍 Changes in the global energy equation
This situation is considered important not only for India but also for the global energy market. In the new energy equation created after the Russia-Ukraine conflict, India strengthened its energy security by taking advantage of cheap Russian oil.
If this waiver expires, India will need to rebalance its energy strategy, which may include greater reliance on long-term contracts and alternative supply sources.
