India’s Energy Security Strengthened Despite West Asia Crisis, Data Shows
The West Asia crisis, triggered by Iran's bombing of regional oil infrastructure, initially raised fears of prolonged supply disruptions and high crude prices. However, by the end of June, oil prices had fallen to $74 per barrel, returning to pre-crisis levels seen in early February. This decline was driven by both reduced consumption due to high prices and strategic measures taken by oil-importing nations, including India, to diversify sources and enhance long-term energy security.
India managed the crisis effectively. Supply was maintained with minimal disruption to retail outlets. Domestic consumption was curtailed through a 20% ethanol blending mandate and promotion of electric mobility. Consumers were shielded from the full impact of rising import prices, as the government and oil marketing companies absorbed a significant portion of the burden. The revenue forgone by the government was Rs 1.7 lakh crore, a decision deemed justifiable given the expected short duration of the crisis—three to four months—which proved accurate.
Later, the consumer price of petrol was increased by Rs 3 per litre, approximately a 7% rise. This increase was the smallest among major oil-importing countries, reflecting India's policy of balancing fiscal prudence with consumer protection. The crisis highlighted the importance of energy diversification and demand management in mitigating external shocks.
