Hardeep Singh Puri says Govt shielded people from global fuel price shocks, delinks it from elections

“During the period of February 28 (when the Strait of Hormuz was shut) and April 23, there has been zero increase in energy prices at the retail point. Many of our colleagues in the world’s largest and most vibrant democratic system will say we kept prices under control because we have an election… We have had many elections in the last four years… If the time comes, the government will take the necessary decisions,” he said.

Stating that he had been “actively monitoring” the supply situation of crude, LPG, LNG, petrol, diesel, and aviation fuel since the closure of the Strait of Hormuz, Puri said, “the first responsibility in terms of the objectives set out by Prime Minister Narendra Modi was to keep India supplied.”

“When a global supply chain faces disruption of 20-30 per cent on important routes and products, no country can be insulated from the shock — freight costs rise, insurance costs rise, cargoes are delayed and every important country is forced to make hard choices. Yet, 60 days into the disruption, India is standing strong,” Puri said, adding that the government did not revise petrol and diesel prices to allow “panic to become policy.”

“For the last four years (since the beginning of the Russia-Ukraine war) despite volatility in the global crude and product market Indian consumers have been shielded at the retail pump. For 60 days in this crisis while crude import costs rose sharply and the region faced severe disruption, that shielding has continued,” said Puri. Puri also noted tha fuel prices went up in the countries neighbouring India and in the west. “In the United Kingdom, diesel prices went up by 26 per cent and petrol prices 11 per cent. In Germany and Western Europe, fuel prices have shot up by 19.8 per cent, while overall EU diesel prices rose by 19.1 per cent and petrol 10.6 per cent,” Puri said.

According to him, the Centre “absorbed the shock at the fiscal system” rather than passing it on to the consumers. He attributed this to the country diversifying its crude sources from 27 to 41 countries over the last decade, adding the US, Norway and Algeria to the list apart from the Middle East. He said that orders were issued to “maximise LPG yield at refineries,” complemented by the fact that the maximum number of LPG-carrying Indian vessels exited the Strait of Hormuz.

“Today commercial LPG is about 70% of pre-crisis levels with priority to steel automobile, textiles, dyeing chemicals and plastics, precisely the labour-intensive sectors that south Gujarat depends on,” said Puri adding that the ceramic industry of Morbi, after facing “fuel-based challenges,” was now back to “full steam.”

According to Puri, domestic production of LPG went up by 60%—from 36,000 metric tonnes per day to 54,000 MT/day—and daily consumption went down from 90,000 MT to 80,000 MT, partly because the government incentivised the shifting from LPG to natural gas.

“I know that some industrial and commercial users have faced difficulties especially in commercial LPG. We had prioritised the domestic consumer over the commercial and industrial… household kitchens came first, commercial and industrial LPG came after that in an allocation system,” said the minister. A three-member committee of executive directors from the Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum was constituted to review LPG allocations to restaurants, hotels, industrial canteens and commercial users, he added.

Other speakers at the conference included Ukraine’s Ambassador to India Oleksandr Polishchuk, Japan’s Ambassador Keiichi Ono, and Singapore’s High Commissioner to India Simon Wong, in addition to Union Jal Shakti Minister C R Patil, Chief Minister Bhupendra Patel and his deputy Harsh Sanghavi.