Crucial for India if war prolongs, could trigger fuel rationing in country

NEW DELHI: Amid escalating war conditions in West Asia, concerns are rising about a possible fuel shortage in India. India primarily imports natural gas from Qatar. Presently natural gas production and distribution in Qatar are reportedly at a standstill. In this situation, India may have to explore new markets such as the United States and Australia. Reports indicate that India has presently natural gas reserves sufficient for 30 days. However, there are also reports suggesting that the country is considering imposing restrictions on its usage. Some unconfirmed reports even suggest that rationing of fuel could be introduced.

A significant portion of the imported natural gas is used for industrial purposes, including urban gas distribution systems in cities and fertilizer manufacturing companies. Only a small share is used for vehicles. Natural gas is also required for electricity generation. Therefore, any disruption in natural gas imports could impact multiple sectors across the country.

Meantime, although concerns have been raised about a potential rise in fuel prices in India due to the war, authorities have stated that there is no immediate need for panic. The country reportedly has crude oil reserves sufficient for 45 days. However, nearly 50 percent of India’s crude oil imports pass through the Strait of Hormuz. The reported closure of the Hormuz route by Iran has caused major concern. As a result, imports from Iraq, Saudi Arabia, United Arab Emirates, and Kuwait have been disrupted.

Under these circumstances, India is continuing efforts to increase imports from Russia. However, purchasing crude oil in this manner is expensive. If the war continues for a prolonged period, oil companies may have to buy crude oil at higher prices, which could eventually lead to an increase in petrol and diesel prices.