New Delhi – Prime Minister Narendra Modi assured Parliament Monday that India is taking steps to mitigate the economic fallout from escalating tensions in the Gulf region, particularly concerning the vital Strait of Hormuz, a critical artery for India’s energy supplies. The Prime Minister’s statements came as fighting in Iran and attacks on energy infrastructure disrupt tanker traffic, driving up global crude oil prices.
Modi stated that the government is focused on ensuring uninterrupted supplies of petrol, diesel, and gas to Indian households. “Our government has tried (to ensure) that petrol, diesel and gas supply shouldn’t get disrupted (and that) households shouldn’t suffer,” he told lawmakers. Sources within the government, speaking earlier this month to NDTV, indicated that efforts to stabilize prices, including increased crude oil purchases from Russia, were proving effective, with the crude oil situation described as “under control.”
The Strait of Hormuz is crucial to India’s energy security, supplying approximately 1.3 million barrels of oil daily before the recent conflict. Globally, the strait handles an estimated 20 million barrels per day – roughly a fifth of the world’s seaborne crude oil trade – with major importers including India, China, Japan, and South Korea. The disruption has pushed Brent crude benchmarks to a nearly four-year high, raising concerns about potential price hikes for Indian consumers.
Beyond crude oil, Modi highlighted the government’s diversification of energy import sources over the past decade. “Earlier we used to import from 27 nations. Now we import from 41 countries,” he said, adding that India maintains strategic reserves totaling 53 lakh metric tons. The Prime Minister also pointed to the expansion of domestic ethanol production, noting that the blending of 20 percent ethanol in petrol has reduced India’s crude oil import needs by 4.5 crore barrels.
The impact extends beyond fuel. Reports indicate shortages of Liquefied Petroleum Gas (LPG) cylinders, used by over 33 crore Indian households, leading to closures or menu reductions at restaurants in major cities like Mumbai, Chennai, Bengaluru, and Kolkata. The government responded on March 11th with an order to increase LPG production by 25 percent, addressing a supply chain that is 90 percent reliant on shipments through the Hormuz strait. India consumes approximately 31.3 million tonnes of LPG annually.
Modi also emphasized the government’s commitment to ensuring the safe passage of oil and gas tankers – as well as those carrying fertilizers – to India, regardless of their flag. Approximately 63 percent of India’s nitrogen fertilizer imports, including urea and ammonia, and 32 percent of its di-ammonium phosphate (DAP) originate in Gulf nations, a critical factor given India’s reliance on agriculture. Recent disruptions have raised concerns about fertilizer supplies, prompting a special report by NDTV highlighting the potential “fertilizer red flag.”
The Prime Minister acknowledged the broader challenges posed by the conflict, stating, “This conflict has also created unforeseen challenges for India. These challenges are economic, related to national security, and humanitarian. India has extensive trade relations with the countries at war and those affected by it.”
PM Modi also spoke with UAE President Sheikh Mohamed bin Zayed Al Nahyan, condemning attacks on the Gulf nation, according to a statement from MSN. The conversation underscores India’s diplomatic efforts to de-escalate tensions in the region.
