The central government on Monday took note on the rising crude oil prices amid the Russia Ukraine war and said it is closely monitoring global energy markets as well as potential energy supply disruptions as a fall-out of the evolving geopolitical situation. The ministry of petroleum and natural gas on the day said that India  is ready to take all appropriate action, as deemed fit, for mitigating market volatility and calming the rise in crude oil prices.

“The geopolitical situation between Russia and Ukraine has resulted in steep increase in global crude oil and gas prices. Government of India is closely monitoring global energy markets as well as potential energy supply disruptions as a fall-out of the evolving geopolitical situation,” Union minister of state Rameshwar Teli said in a press release on Monday.

“Government of India is ready to take all appropriate action, as deemed fit, for mitigating market volatility and calming the rise in crude oil prices,” he added.

In November 2021,in a bid to control inflationary pressures, Government of India, in consultation and parallelly with major energy consumers, had agreed to release 5 million barrels from its Strategic Petroleum Reserves, the press release noted.

Prices of petrol and diesel have been market-determined with effect from 26.06.2010 and 19.10.2014 respectively. “Since then, the Public Sector Oil Marketing Companies (OMCs) take appropriate decision on pricing of petrol and diesel in line with their international product prices, exchange rate, tax structure, inland freight and other cost elements,” the government said in the press release.

The prices of petroleum products in the country are linked to the price of respective products in the international market, it added.

The Central Government reduced the Central Excise duty on petrol and diesel by Rs. 5 and Rs. 10 per litre respectively effective from 4 November, 2021 after the amounts rose to a seven-year high, creating problems for the common man.

“The measure was aimed to give a further fillip to the economy and to boost consumption and keep inflation low, thus helping the poor and middle classes. Many States/UTs have also reduced the VAT on petrol and diesel subsequently,” Teli said.

Prices of LPG in the country are based on Saudi Contract Price (CP), the benchmark for international prices of LPG.

“Saudi CP has risen approximately 228 per cent from April, 2020 to February, 2022 (236 USD/MT to 775 USD/MT). However, for domestic LPG the Government continues to modulate the effective price to consumers to insulate the common man from rise in international prices,” Teli added.

The war in Ukraine has resulted in a massive increase of crude oil prices as supplies have been hit due to sanctions imposed on Russia for invading the country. While experts believe that the prices of petrol and diesel in India will increase soon in such a scenario, the same have been kept stable as of now.