India's oil exports are banned: Who profits from the cheap oil purchased from Russia?
The Government of India has extended the ban on the export of petrol and diesel. This, it is thought, was done to guarantee that refined fuel would be available on the domestic market. The export of petroleum products and diesel was also banned in the financial year that ended last Friday. According to Reuters, the latest notification issued on Saturday night did not say when the ban will end.
Accordingly, the refineries will have to sell 50 percent of their total annual petroleum exports and 30 percent of their diesel exports in the domestic market. Extending the ban will discourage private Indian refineries from buying Russian fuel and then exporting it to other countries. These include the export of oil to European countries that have stopped buying oil from Russia due to the war in Ukraine
Instead of selling Russian oil on the domestic market, private Indian corporations like Reliance Industries and Nyara Energy were exporting it at steep discounts and reaping enormous profits. In view of this, the Indian government imposed this ban last year.
Due to the behavior of the private
companies, the entire burden of supply in the domestic market falls on the government
refineries and they have to sell oil at the lower price set by the government.
Who benefits from cheap oil?
Experts believe that Indian private companies on a large scale are importing cheap Russian oil, which may affect foreign exchange reserves in the future. India paid Russia $20 billion for oil in the seven months between May and November 2022, according to the Ministry of Commerce and Industry, which is the largest payment by India in the last ten years.
Experts say that when the Indian government claims that it is importing Russian oil in the national interest, people expect it to benefit the public. Diesel in Delhi was Rs 87 before the Ukrainian war, but it currently costs about Rs 90.
Three-quarters of Russian oil purchased from India is bought by private companies Reliance and Russian-controlled Nyara Energy. A third of the crude that Reliance buys comes from Russia, compared to before the war
20-billion-dollar payment to Russia
It also means that state-owned oil
companies like Indian Oil Corporation, Bharat Petroleum, and Hindustan
Petroleum get a smaller share of cheap Russian oil.
While these government companies provide
90% of domestic oil.
Experts say that private companies that
import Russian crude oil, refine it, and re-export it, are making high profits. And
they are making record profits.
According to Parveen Chakraborty, a senior
leader of the opposition Congress Party and an economist, India paid $20
billion to Russia for oil purchases in the last seven months of last year, not
for the common man but for "huge profits of some private companies".
Paid for'.
According to him, the dead bodies of
Ukrainian citizens were used for the profit of some private Indian companies.
Oil imports from Russia
Professor Amitabh Singh, an expert in economic affairs, said in a conversation with the BBC that "Until now, India used to import about one percent of crude oil from Russia, now the import of crude oil has increased to more than 20 percent." Over 1.2 million barrels of crude oil are purchased by India each day from Russia. India also imports edible oil and fertilizers from Russia in addition to crude oil.
Imports are increasing but another concern is that the country's exports are decreasing. According to the data, imports have increased by about 400 percent and exports have decreased by about 14 percent. India and Russia decided to do business in local currency (rupee and ruble).
The Reserve Bank of India announced this in
July 2022 and the RBI also allowed Russian banks to open Vostro accounts in
India.
