Amid the 3-month-long war between Russia and Ukraine, Russia made a big announcement regarding crude oil. Russia had said that it would sell crude oil at 30 per cent lower than the global benchmark. Due to this, there was the hope of a fall in the rate of petrol and diesel in India. But Indian Refiners did not get many benefits from cheap crude oil from Russia, but European countries are getting the full use. In such a situation, the country’s petrol and diesel prices may increase in the coming days.
India is not getting much benefit.
After the war with Ukraine, India’s government and private refineries increased crude oil exports from Russia. Russia is selling crude oil at a lower rate than the global rate. But after reaching India, Russian crude oil is getting cheaper by only $ 10 per barrel. At the same time, European countries are taking advantage of this exemption from Russia. Europe is closer to Russia, due to which the cost of delivery of crude oil is lower. At the same time, India has to spend more on delivery.
Shipping cost more
According to reports, Russia is currently selling crude oil at 35 per cent lower than the global rate. It is on a free on board basis. After this, Indian refineries have to pay considerable shipping and insurance costs for importing crude oil from Russia.
The ongoing war between Russia and Ukraine has led to a sharp increase in shipping and insurance costs. Additionally, traders doing business with crude oil have also increased their marginal cost. Due to this, crude oil is getting cheaper by only $ 10 per barrel to the Indian refinery compared to the global benchmark.
India imported more in April.
According to S&P Global Market Intelligence, Russia’s crude oil accounted for 5 per cent of India’s total oil imports in April for the first time. The refinery had turned to Russia for cheaper oil amid rising demand and prices. Before the Russo-Ukraine War, Indian refineries used very little Russian oil due to high shipping costs.
The European Union gets 27 per cent of its oil imports from Russia. Despite the war and sanctions, Europe remains the largest buyer of Russian crude oil. Britain imports 8 per cent of its oil needs from Russia. The prices of fuel, petrol and diesel in the Indian market have remained constant.
