New Delhi: India’s ability to shield itself from the West Asia crisis could come under pressure if the conflict intensifies, Petroleum and Natural Gas Minister Hardeep Singh Puri said on Thursday, warning that rising US-Iran tensions could worsen the situation.
Speaking at the Public Affairs Forum of India’s 13th Annual Forum, Puri said the country had navigated the disruption successfully so far, but cautioned against assuming it would remain insulated from a deeper crisis.
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“The crisis is certainly not over. It is not only ongoing but it has potential of exacerbating,” he said.
India had protected itself from the worst effects thus far, he added, while acknowledging that a further escalation could pose fresh challenges.
Puri said the main concern was disruption to oil transport routes rather than a shortage of crude in international markets. He put global supply at 102 million barrels per day, against demand of 94–95 million barrels per day.
Closure of critical chokepoints, including the Strait of Hormuz and Bab-el-Mandeb, could nevertheless create supply difficulties, he said.
India’s refining capacity of 267 million tonnes per annum helped maintain domestic fuel availability despite supply challenges at the peak of the war, Puri said. Capacity is expected to rise to 320 million tonnes per annum by 2030.
Saudi Arabia and the United Arab Emirates are interested in investing in India’s upcoming refineries, provided the projects offer meaningful returns, the minister said.
Access to India’s growing downstream market would be an important consideration for prospective investors, he added.
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“Nobody wants to come and invest in a refinery unless they can also get a slice of your growing downstream market,” Puri said.
India also continues to export refined petroleum products, even as countries including Russia and China have imposed export bans, he said. The country intends to honour its contractual export commitments.
Addressing consumer concerns over ethanol-blended petrol, Puri said the government has no plans to increase blending beyond 20 percent.
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