Sunday, June 23, 2024

Modi’s snub on price cap on Russian oil: “Don’t restrict energy supply”

Indian Prime Minister Narendra Modi on Tuesday urged world leaders to avoid promoting any measures that restrict the energy supply in the global market.

Speaking at the G-20 summit in Bali, the leader of the world’s third-largest oil consumer expressed serious concerns over the ruined global supply chain, triggered by the Ukrainian crisis and the COVID pandemic.

India, the world’s fifth-largest economy, imports 85 percent of its oil needs from the global market.

“We must not promote any restrictions on the supply of energy, and stability in the energy market should be ensured,” he said.

New Delhi has not only sustained Western pressure on Russian oil purchases but eventually increased the import of “discounted” oil to cushion nearly 1.4 billion people from inflationary pressure.

The G7 bloc of the world’s richest nations, plus Australia, announced a plan to limit the international price of Russian crude through a price cap in September in a bid to “deprive” Moscow of its oil revenues in the wake of the special military operation in Ukraine.

The proposed cap is scheduled to kick in on December 5. Meanwhile, Moscow said it will not supply oil to those who decide to follow the price-capping mechanism.

The Indian Prime Minister also raised the issue of fertilizer shortages, saying the disruption may lead the world into a severe food crisis.

“The current shortage of fertilizers in terms of food security is also a huge crisis. Today’s fertilizer shortage is tomorrow’s food crisis, for which the world will not have a solution,” the prime minister underlined.

Russia has significantly increased exports of fertilizers, among other commodities, to India to assist the agriculture sector, which provides a livelihood for nearly half of the 1.3 billion-plus population.

In September, Russian President Vladimir Putin noted that fertilizer supplies to India have risen more than eight-fold in the current financial year.

In May, New Delhi finalized a barter agreement with Moscow to obtain fertilizer. New Delhi is likely to strike a long-term deal with Russia’s Uralkali for the supply of one million metric tons of potash fertilizer.

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