India to import more oil from Russia

Russian Ambassador Denis Alipov says West’s criticism of India on its imports of Russian crude oil is a reflection of their unprincipled position and double standards…reports Asian Lite News

Amid high global crude prices India is set to further increase its oil imports from Russia. With economic activities in India now touching the pre-Covid levels, the country’s energy requirements have been steadily rising this year compared to last year.

On an average, India is importing about 600,000 barrels a day from Russia at a heavily discounted price. India’s total crude oil imports have already increased by 35.4 per cent and 21.3 per cent during July this year and April-July period respectively as compared to the corresponding period of the previous year, official data revealed.

The third largest consumer of oil, India’s net import bill for oil and gas was $14.9 billion in July 2022 compared to $8.0 billion in July 2021. India is importing Russian oil at a price significantly cheaper than Saudi Arabia.

Low oil prices are critical for the government to save foreign exchange reserves and control inflationary pressures. With rising economic uncertainties across the world, the challenge for India’s policymakers is to ensure growth picks up while inflation is maintained at a reasonable level.

“We will continue importing oil from Russia, we are getting it at a discounted price. Our priority is to ensure that inflation remains under control. It is India first,” BJP’s national spokesperson Gopal Krishna Agarwal told India Narrative. Several countries are grappling with multiple challenges arising out of rising prices.

India’s headline inflation rate in July stood at 6.7 per cent, lower than market expectations. In June it was 7.01 per cent.   lower to a five-month low of 6.71% in July of 2022 from 7.01% in June, compared to market forecasts of 6.78%. This is the lowest since April—the beginning of the current financial year.

“We have to be careful though our macroeconomic indicators continue to remain strong,” Agarwal said, adding that the government’s policies will be driven by the interests of the masses.

Despite intense pressure from the US to disengage from Russia, New Delhi has continued to purchase oil and fertilizer among other things from Moscow.

External affairs minister S Jaishankar earlier said that New Delhi has not been defensive about its decision to purchase Russian oil.

The minister also noted that since global oil and gas prices are unreasonably many suppliers who deal with the Asian markets are now diverting to Europe. “It is a situation today where every country will try to get the best deal possible for its citizens, to try to cushion the impact of these high energy prices. And that is exactly what we are doing,” Jaishankar said in Bangkok.

Hit by an acute energy shortage, the annual inflation in the Euro area in July touched 8.9 per cent, up from 8.6 per cent in June. In the US, it was 8.5 per cent in July. Though this is a drop from 9.1 per cent in June, worries for the world’s largest economy are rising with rising food prices.

Russia slams West’s criticism of India

The criticism of India by the Western countries on its imports of Russian crude oil while exempting themselves from their “own illegitimate sanctions” is a reflection of their unprincipled position and double standards, Russian Ambassador Denis Alipov said.

The envoy said trade between India and Russia has been on an upswing and both sides have several payment systems in place and that there is an option even of using currencies of third countries with certain “partners” in Asia and in the Middle East offering viable choices.

Historically, Russia has not been a major source of fossil fuel for India but the imports of discounted Russian crude oil have seen a massive increase in the last few months, notwithstanding rising disquiet in many Western capitals.

“Those in the West who criticise India not just slyly keep silent about the fact that they themselves actively buy Russian energy resources exempting them from their own illegitimate sanctions, but in doing so explicitly demonstrate their unprincipled position and double standards while claiming otherwise,” Alipov said.

The ambassador said Europe has “completely lost” its independent voice while “appeasing” the USA’s ambitions for power, and is now trying to sustain its economic well-being while triggering an escalation of energy prices for the rest of the globe.

“For what reason should India pay for that,” Alipov asked.

The ambassador also suggested that there was no impact of Western sanctions against Moscow on India-Russia trade and said the trade volume in the first six months of this year alone recorded a turnover of USD 11.1 billion (one billion=100 crores), which was around USD 13 billion in 2021.

“We have every reason to believe that by the end of this year we will reach a historic record, and that is not only due to large-scale supplies of hydrocarbons which have grown more than 10 times,” he said.

Talking about several payment systems for bilateral trade, Alipov said one of them is using the national currencies, adding the volume of trade in national currencies amounted to over 40 per cent in recent years.

“Recently the Reserve Bank of India issued a special circular, which extends the use of Rupee in international trade. It is yet another step to support the option for the trading community to exercise invoicing, paying and settling operations in national currencies,” Alipov said.

“Secondly, there is a mechanism of using currencies of third countries with viable options offered by our partners in Asia and in the Middle East. We also see immense potential in the establishment of the BRICS international reserve fund,” he said.

Alipov said the Russian companies and banks, which are not sanctioned, can still engage in economic activities using the US Dollar and Euro.

“As for the impact of the Western sanctions, obviously their side effects were miscalculated, both politically and economically. The rise of fuel and food prices triggered galloping inflation worldwide, and even developed economies risk falling into recession,” he said.

The ambassador said that there is an “incredible potential opening up in trade in Russia with “huge space” rendered vacant after the “self-inflicted” withdrawal of many Western companies for political reasons.

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