FM Nirmala Sitharaman expresses concern about rising crude oil prices

The government is watching to see if there are alternative sources it can go raw from, she said

The government is watching to see if there are alternative sources it can go raw from, she said

Union Finance Minister Nirmala Sitharaman on Tuesday expressed concern over soaring crude oil prices due to the Ukraine crisis, noting that the central government is looking at alternative sources.

During an interactive session organized by the BJP’s Karnataka Unit, she was asked about the impact of rising crude oil prices and the war in Ukraine on the Indian economy.

“It will certainly have an impact on the Indian economy,” the minister said. “How willing we will be to take it on as a challenge and mitigate the impact we will see as we move forward [along].”

Noting that India imports more than 85% of its crude oil needs, she said if oil prices go up that’s a concern and “now we have to see how that plays out”.

She pointed out that oil marketers set pump prices based on the 15-day moving average. “But now we’re talking about averages and above-average numbers.”

The government is monitoring whether there are alternative sources from which crude oil can be extracted, it said, but hastened to add: “Obviously global markets from different sources are equally unthinkable.”

“It [rising crude prices] will play a role. We have made provisions for this in the household. But this determination is only based on a previously prevailing average, which is now exceeding it. So we have to see how we can do that.”

International benchmark Brent was trading at around $127 a barrel on Tuesday.

Bringing petrol and diesel into the GST scope, she said: “It’s already in there (before the GST council). Petrol and diesel are already in the GST [Council]“.

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