Home / News / India /  EU puts price cap on Russian oil; India concerned about stability, affordability

India stated on Wednesday that it was concerned about the stability and accessibility of the energy markets and that the impact of the EU's decision to cap the price of Russian seaborne oil was unclear. According to S Jaishankar, the minister of external affairs, Indian refiners will keep searching for the best offers in the national interest.

"We do not ask our companies to buy Russian oil. We ask our companies to buy oil (based on) what is the best option that they can get. Now it depends on what the market throws up," Jaishankar said while replying to clarifications sought by MPs on his suo moto statement on foreign policy.

He further said that the companies will go after sources that are more competitive. "Please do understand it's not just we buy oil from one country. We buy oil from multiple sources, but it is a sensible policy to go where we get the best deal in the interests of the Indian people and that is exactly what we are trying to do," he added.

India, the third-largest crude importer in the world after China and the United States, has been buying Russian oil at a discount after some Western nations avoided it as a form of retaliation against Moscow for its invasion of Ukraine.

Russia's market share in India's imports increased from 0.2% before the Russia-Ukraine conflict to 4.24 million tonnes, or nearly 1 million barrels per day, in October, taking a 21% share that is comparable to Iraq's and higher than Saudi Arabia's share of about 15%.

Regarding price caps, Jaishankar claimed that India was still unsure of the effects of the decision.  Our main concern is how it would affect the affordability and stability of the energy markets, he said.

According to Jaishankar, India has publicly stated that this is not a time for war in regards to the conflict between Russia and Ukraine. "We have consistently urged dialogue and diplomacy," he aserted.

India must act in the best interests of its citizens as a result of the war.

"We have also done the right things about that," he said in reference to the impact of the war on the people of India or the rest of the world. "We have taken steps to lessen the impact, whether it be from fuel prices, food inflation, or fertiliser costs."

In response to the claim made by opposition MPs, he said, "I plead guilty to it." If the claim was that the government prioritised the needs of the Indian people, he added.

He said, "Yes, I put the interests of the Indian public first. It is my duty. It is my duty to ensure that your fuel, fertilizer, food... the Indian public does not pay the cost of some other countries' actions or some other region's actions. Actually... that is the way, in my view at least, (how) foreign policy should be conducted."

What EU is doing

As part of an effort by the West to reduce Moscow's oil revenues and restrict its ability to wage war in Ukraine while maintaining stable global oil prices and supplies, the executive body of the European Union has requested that its 27 member countries set a cap on the price of Russian oil at $60 per barrel.

Russian oil sold above the price cap will no longer be handled by western shipping and insurance companies as of 5 December. The price cap will not apply to ships that load Russian oil before 5 December and unload it at their destination before 19 January.

Earlier this week, a senior government official said India can keep purchasing Russian oil as long as it can send ships, provide insurance, and come up with a method of payment.

(With inputs from PTI)

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