Surana HPCL warned supply disruption because crude oil was closed at $ 100 per barrel

The Chairman of the HPCL and Managing Director of the Constitutional Court Surana warned supply chain disorders even when the Russian-Ukrainian crisis pushed crude oil to close to $ 100 per barrel on February 22.

Brent crude, global benchmarks, rose $ 3.48, or 3.7 percent, at $ 98.87 at around 2:30 a.m., previously reaching $ 99.38, the highest since September 2014, Reuters reported.

“There are three factors that affect crude oil prices. One of them is the Russian-Ukrainian crisis. The second is a contrarian view that comes from the Iranian-US discussion. The third is the inability of the OPEC constant to increase production to the need. So, there is a lack of 900,000 barrels Per day, “said Surana to CNBC-TV18 in an interview.

Rising Crude is a great concern for India, which meets 85 percent of its requirements through imports. The US and other Western countries tend to slap sanctions against Russia after recognizing two separating areas in Ukraine and ordering troops, fanning supply problems. Russia is the second largest crude exporter after Saudi Arabia.

Supply shortage

Surana said that more deteriorating the Russian-Ukrainian crisis could cause supple disruption.

Talking about the increase in oil prices recently, Surana said OPEC countries plus could not increase inventory and there were about 900,000 barrels.

Domestic demand for gasoline reaches the pre-pandemic and diesel level will also rise with international travel which tends to be open from mid-March.

“With the possibility of starting international travel and Omicron’s concern is almost over, the price moves up,” he said.

On the prospect for the marketing segment in FY23 with the current margin in a negative, he said “gasoline rose. With the concern of the third wave disappeared, diesel requests must also pick up.”

Asked whether oil prices would rise after March 10 after the election was completed in five states, Surana said the high level of taxation, high commodity prices and exchange rates determined the domestic level. Domestic prices must be in harmony with international rates, he said.

At the price remaining unchanged over the past three months, he said, “the price of crude oil continues to be high due to taxes and exchange rates all run out. If they continue to be high, there is no choice but to straighten it at international prices.

“We try to ensure that we can provide fuel to end consumers at the most reasonable prices at the same time remain in harmony with the international market.”

‘Balancing business’

For questions whether customs pieces are needed to cool the price, Surana said the oil marketing company has no control over government policy.

“Taxes are government prerogative … there is a product sensitivity in the market for people. It cannot rise like this. There must be a balance between taxation and international commodity prices,” he said.

“As far as taxation concerns, it is a call that must be taken by the government. Hopefully the government thinks about regulating taxes at a balanced price,” Surana said.

On the increase in HPCL debt, which is around RS 40,000 Crore on FY21 and is expected to rise to 64,000 crore because of expansion, Surana said debts had fallen because they did not fund expansion plans.

“Debt has been managed quite well because the company also produces profits. We feel comfortable now. Will study the image taking into account services. Large projects are finished now,” he said.