The war in Iran has led to a spike in petrol and diesel prices across the world. With Strait of Hormuz still closed, oil supplies across the world have been affected. However, one country has kept the prices stable- India.
Now, Pakistan’s Petroleum Minister Ali Pervaiz Malik has pointed out how India is relatively stable compared to his country because of its strategic oil reserves and adequate forex reserves, which absorbed the impact of the oil disruption due to the blockade in the Strait of Hormuz.
Speaking to a local news channel, Malik said, “India doesn’t just have 600 Arab dollars worth of reserves but they also maintain strategic reserves. This helps them cushion this crisis. Besides, they are not part of IMF programme and they tried to insulate themselves by reducing taxation as oil prices soared … they had the fiscal space to do that.”
He further said, “Now, with diesel prices rising up to 3-4 times, we decided to reduce the levy to zero on diesel and shift the entire burden to petrol while protecting motorcyclists by giving them targeted subsidy. However, had we broken our commitment with IMF and increased our losses, the consequences would have been worse. We conducted backchannel negotiations with IMF and convinced them to reduce levy by Rs 80 per litre.”
“We only have commercial reserves. We have crude worth five to seven days. And the refined product with OMCs can only last 20-21 days. We are not like India which has 60-70 days of reserves and can release it with just a single signature”, he added.
