Robust energy infra built over past decade helped India navigate West Asia crisis

New Delhi, June 29 (IANS) As the Middle East crisis unfolded, India responded better than several global economies because the ground had been prepared, and infrastructure built over the past decade is the reason a closure of the Strait became a managed event rather than a crisis at the pump and the kitchen, according to the government.

India’s crude position is defended by diversification rather than by stock alone. The number of source countries has widened from 27 to 41, with newer suppliers such as Libya, Gabon, Equatorial Guinea and Guyana added and volumes from the United States and Russia deepened, according to the Petroleum Ministry.

“Routing has shifted with it, so that a materially smaller share of India’s crude now transits Hormuz than did earlier in the year. Strategic reserves under ISPRL hold about 5.33 million tonnes, part of a cover of roughly three weeks, with the Chandikhol and Padur expansions set to take India towards about twenty-one days, the ministry informed.

India was among the small group of nations able to keep its cargoes moving through the Strait, with no shortage of any petroleum product.

Moreover, ethanol blending reaching 20 per cent provides a further structural offset, saving a substantial volume of crude imports each year.

Crude has fallen back to around $74, close to its pre-crisis level and still easing as tanker traffic through the Strait recovers.

A full return of traffic is expected to take time, with mine-clearing and a large vessel backlog still to work through, but the worst of the supply disruption is now behind the market, said the ministry.

On petrol and diesel, the shock was buffered, not passed through. The Centre cut central excise duty by 10 rupees a litre on petrol and diesel on March 27, 2026, reducing the special additional excise on petrol from Rs 13 to Rs 3 and on diesel from Rs 10 to nil, a measure involving revenue forgone of about Rs 1.7 lakh crore.

The marketing companies then held retail prices unchanged for over two months, carrying a daily under-recovery of the order of a thousand crore rupees as the crude move peaked.

When a revision became unavoidable, it was a single increase of Rs 3 rupees a litre on May 15, the most restrained of any major economy.

Measured from the eve of the crisis, India’s pump-price increase has been among the lowest of any major economy. India experienced a cumulative petrol price hike of roughly Rs 7.5 per litre.

LPG was the sharpest exposure and the clearest success. More than half of the cooking gas reaching an Indian kitchen had been arriving through the Gulf, and a large part of that went, almost overnight, towards zero.

The LPG Control Order was issued within eight days of the disruption, directing all refineries to maximise output by diverting propane, butane, propylene, and butene streams.

“Within seven days, domestic production rose from thirty-five to fifty-four thousand tonnes a day, well above the residual import requirement of about thirty thousand metric tonnes a day, so that the shortfall was substantially replaced by domestic output alone. Refineries that had never produced LPG were reconfigured to do so,” the ministry informed.