National interest is guiding factor: Vikram Misri on India's energy imports

Foreign Secretary Vikram Misri said India's energy import decisions are driven by national interest, diversification and price stability, amid scrutiny of Russian oil imports, global market volatility

Foreign Secretary Vikram Misri on Monday said India is not just one of the largest consumers of energy but also plays an important role as a stabilising factor in global energy markets, which is one reason why New Delhi imports energy from multiple sources.

 

Misri said whether it was “the government or indeed our business, at the end of the day, national interest would be the guiding factor for us in our choices” in India’s energy imports.

 

At a briefing of the Ministry of External Affairs (MEA) on the visit of Seychelles President Patrick Herminie, who held talks with Prime Minister Narendra Modi in the morning, the foreign secretary was asked to clarify India’s position on its imports of Russian oil in the context of the India-United States interim trade agreement framework.

 

 

Misri’s comments come amid Commerce and Industry Minister Piyush Goyal maintaining that questions pertaining to India’s oil imports from Russia should be directed to the MEA.

 

Misri elaborated on India’s thinking on its energy imports. He said that, as is known, India is a net importer in the oil and gas sector.

 

“We are a developing economy. We have to be conscious about our resource availability. Naturally, when you are dependent to the extent of 80-85 per cent on an imported resource, you have to have concerns about the possibility of inflation driven by energy costs. So, it is not surprising, therefore, that our foremost priority is to safeguard the interests of Indian consumers insofar as energy is concerned, to ensure that they receive adequate energy at the right price and through reliable and secure supplies,” he said.

 

Misri said India’s import policy insofar as energy is concerned is therefore driven entirely by these objectives. “Now, you would also have observed that in recent years the global economy has faced significant uncertainties which have had a major impact on the stability of global energy markets. India certainly, I would imagine, along with a lot of countries around the world, if not every country, has a shared and common interest in ensuring stable energy prices and secure supplies,” he said.

 

“I would underline that India is not just one of the largest consumers of energy, but it also plays an important role as a stabilising factor in global energy markets, and that is one reason why we import energy from multiple sources,” Misri said, adding that the key drivers of India’s energy policy are “adequate availability, fair pricing, and reliability of supply”.

 

The foreign secretary said India’s energy imports data bears out that the country imports crude oil from dozens of countries. “We are neither dependent on any single source for this, nor do we intend to be. And it is natural for the mix of sources to vary from time to time depending on objective market conditions,” Misri said.

 

He said India’s approach is to maintain multiple sources of supply and diversify them as appropriate to ensure stability. “Therefore, I would say that the more diversified we are in this area, the more secure we are,” he said.

 

Misri said the actual sourcing of oil is done by oil companies in the public sector as well as the private sector. “And they make decisions based on market conditions. They assess availability at any given point in time, they assess risks, they assess costs in this process. And obviously, all of these companies also have their own internal accountability-related processes to look at and certain fiduciary responsibilities in the market. So, at any given time, there is a rather complex matrix of issues that these companies have to take into account,” he said, adding that these include important financial and logistical aspects.

 

“I expect that what you will continue to see in this sector is business choices being made based on these considerations that I have outlined. What I can firmly and confidently say is that whether it is the government or indeed our business, at the end of the day, national interest will be the guiding factor for us in our choices,” Misri said.