The move comes at a time of rising crude prices, a price cap on Russian oil, and a bar on the use of Russian ships for transporting oil and gas.
“The government has been asking oil companies to buy ships….But where are the ships available,” said one of the two people, adding that despite poor availability, large oil companies are likely to locate and procure them.
Freight charges are key in terms of retail price calculation of petrol and diesel, which have remained elevated and unchanged for over a year now.
The suggestion is largely based on the pretext of the volatility in the energy market witnessed in the past year after Russia’s invasion of Ukraine. Sanctions on transport through Russian ships by the West resulted in a lack of ships and the emergence of several new transporters to move oil from Russia, which has become the top supplier of oil to India over the past year.
The volatility in the oil market and elevated prices do not augur well for the Indian economy, which imports 85% of its energy requirement. Retail fuel prices have been high, and petrol has been sold at over ₹100 per litre in some cities since May last year.
Although international oil prices have eased from the multi-year highs reached last year, prices have started to pick up again over the past two months. The price of India’s crude basket, which averaged $74.93 per barrel in June, stood at $94.17 per barrel as of 14 September.
