Europe set the bar on Russian gas high enough to leave India unaffected

The impact of the gas price cap on India may, however, be muted as the EU, fearing disruptions to domestic gas supplies in winter, set the bar very high

The movement of fuel prices in 2023 will dictate how much India will be affected by the combined impact of two petroleum price caps imposed by western nations.

On December 19, a fortnight after the US-led G7 group of nations had imposed a price cap on crude oil supplied by Russia, the energy ministers of the European Union (EU) agreed on a “market correction mechanism” to cap prices of natural gas in Europe. Both these measures taken together were designed to reduce Russia’s earnings from exports of petroleum, and stabilise prices of fuel, a key inflationary determinant, in the US