Credit For Increase In Russian Oil In India Goes To PM: Sitharaman

Union Finance Minister Nirmala Sitharaman on Thursday said that the credit of increased share of Russian oil in India goes to Prime Minister Narendra Modi’s statesmanship to take the decision of boosting imports of Russian oil at discounts as it helped in reducing the import bills.

Speaking at Taming the inflation -- event organised by the Indian Council for Research on International Economic Relations (ICRIER) she informed that the share of Russian oil in India's overall oil import basket increased from 2 per cent to 13 per cent in a couple of months after the beginning of the Russia-Ukraine war, which led to a spike in energy prices globally.

“I respect the PM for his courage to get it (crude oil) from Russia because they are willing to give on discount... our entire import had 2 per cent of Russian component, it was ramped up to 12-13 per cent within a couple of months,” she said.

“Sanctions, sanctions but countries are finding their own way to get that Russian crude, gas... I give credit to the statesmanship of the PM to make sure that we keep our relationship with all countries & yet manage to, till today, get the Russian fuel,” the minister added.

Sitharaman said the increase in oil imports at discounted prices from Russia is a part of the "inflation management".

Crude oil prices soared to near record high earlier this year due to the Russia-Ukraine conflict. Western countries led by the United States imposed several sanctions on Russia. However, Prime Minister Narendra Modi's government decided to ramp up oil imports from Russia giving supremacy to the national interests.

She said that inflation cannot be handled only by the Centre and ways have to be found to work together with states to manage inflationary matters.

“Inflation handling can't be left singularly to the monetary policy. The majority of measures to tame inflation are outside monetary policy. Fiscal and monetary policies have to work together to tame inflation. Inflation handling can't be left singularly to monetary policy,” she said.

Minister said that Input prices for agriculture and MSMEs have to be managed which feed inflation.
"Solutions to inflation management need to be country-specific," the finance minister said.

India’s retail inflation peaked in April at 7.8 per cent and has moderated since then with the latest inflation print July at 6.7 per cent. RBI Governor Shaktikanta Das has said that inflation is expected to soften in the second half of the current fiscal with the overall headline number dipping within the tolerance band in Q4.

At the USIBC event on Wednesday, Sitharaman said that inflation was no longer a “red-lettered” word and that job creation and equitable income distribution were top priorities of the government.

“Some of course are red-lettered (priorities), some may not be. Red-lettered ones would of course be jobs, equitable wealth distribution and sure India is moving on the path of growth,” she said, adding that in that sense inflation is not red-lettered.