Experts urge govt to lock in crude oil purchases as prices start rising

They suggest it is time the govt chipped in as a sovereign oil hedger, perhaps by taking hedging as a Cabinet decision

As oil prices start firming up from decades low, experts are suggesting the Indian government hedge part of its oil import to lock in the low price for the future.

Admittedly, hedging of oil by importing countries is not common, but gaining traction. Egypt, Ghana, Jamaica, etc, have started hedging. Neighbouring Pakistan is also contemplating hedging oil at a sovereign level to take advantage of the soft oil prices. Exporters do routinely hedge their oil. For example, Mexico saves billions of dollars hedging its oil exports.

In India, public sector oil marketing companies (OMCs) don’t hedge oil beyond the level they import