Modi Urges Indians to Conserve Fuel as Oil Shock Spreads

India’s Prime Minister called on the nation to work from home, travel less, and conserve fuel to help the government save foreign exchange.

“In the current situation, we must place great emphasis on saving foreign exchange,” Narendra Modi said, as quoted by Reuters. The prime minister also urged Indians to stop buying gold, again to conserve foreign exchange. Modi also called on farmers to reduce their fertilizer use by as much as 50%.

CNBC recalls that India spent $174.9 billion on crude oil and refined product imports in the financial year that ended on March 31, as its import bill swelled amid the oil price jump prompted by the war in the Middle East. Another $72 billion was spent on gold imports over the period.

Since then, oil prices have risen further, with Brent crude topping $105 per barrel again earlier today, after President Donal Trump rejected Iran’s response to a peace plan he proposed last week. Trump called Iran’s version of the peace deal “totally unacceptable”, dampening hopes of a swift resolution of the war. West Texas Intermediate was trading at $100 per barrel at the time of writing.

More than 40 India-bound vessels, nearly half of which carry energy products, are still trapped in the Persian Gulf, unable to pass through the Strait of Hormuz, officials told India last week. The ships are laden with crude oil, liquefied petroleum gas (LPG), and LNG, as well as fertilizer and other products. A total of 13 ships flagged to India are still stuck west of the Strait of Hormuz, according to the Indian government.

India relies on the Middle East for as much as 50% of its crude oil imports and 60% of its liquefied natural gas imports. Dependence is the heaviest in liquefied petroleum gas, however, which Indians use for cooking. In LPG, India is almost entirely dependent on the Middle East.

By Irina Slav for Oilprice.com

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