New Delhi: Oil Minister Hardeep Singh Puri has dismissed White House trade adviser Peter Navarro’s ‘laundromat’ remark, asserting that India has not violated any rules in purchasing Russian oil and its energy trade since the Ukraine war has helped stabilise global markets and keep prices in check.
In a signed article for The Hindu, Puri rejected claims of profiteering, saying India has long been the world’s fourth-largest exporter of petroleum products, well before Russia’s invasion of Ukraine in February 2022, and its export volumes and margins have remained broadly the same.
“Some critics allege that India has become a ‘laundromat’ for Russian oil. Nothing could be further from the truth,” he wrote without directly naming Navarro.
India’s imports of Russian oil soared from under 1 per cent to nearly 40 per cent of total crude intake after the Ukraine war, driven by steep discounts as Western nations cut purchases to penalise Moscow. While the move ensured cheaper energy for India, it drew criticism from the Donald Trump administration, which accused New Delhi of profiteering by refining and exporting Russian crude, including to Europe.
Last week, Navarro, in a series of posts on X, labelled the Russia-Ukraine war as “Modi’s war” and accused New Delhi of funding Russian President Vladimir Putin’s “war machine”.
“India’s big oil lobby has turned the world’s largest democracy into a massive refining hub and oil money laundromat for the Kremlin,” he had stated in the barrage of posts, which ended with a picture of Prime Minister Narendra Modi in saffron robes.
Puri countered him, saying that, unlike Iranian or Venezuelan crude, Russian oil purchase has never been sanctioned.
“It (Russian oil) is under a G-7/European Union price cap system deliberately designed to keep oil flowing while capping revenues,” he said. “There have been 18 rounds of such packages, and India has complied with each one.”
He went on to assert that every transaction by India has been legal.
“Every transaction has used legal shipping and insurance, compliant traders and audited channels. India has not broken rules. India has stabilised markets and kept global prices from spiralling,” he asserted.
Last week, brokerage CLSA, in a report, stated that if India halts Russian oil imports, crude prices could spike to USD 90-100 per barrel. With limited buyers for Russian crude, India’s exit could leave up to 1 million barrels per day – about 1 per cent of global supply – stranded. While India could replace the supply, the disruption would likely push global prices and fuel inflation.
Puri said India has been the fourth-largest exporter of petroleum products for decades – long before the Ukraine conflict – and its refiners process a basket of crudes from across the globe.
“Exports keep supply chains functioning. Indeed, Europe itself turned to Indian fuels after banning Russian crude,” he said. “The volume of exports and refining margins – gross refining margins or GRMs – remain broadly the same. There is no question of profiteering.”
The Minister stated that India acted to shield its citizens when global prices spiked after the Ukraine war. “Oil PSUs absorbed losses of up to Rs 10 per litre on diesel, the government cut central and state taxes, and export rules mandated that refiners selling petrol and diesel abroad must sell at least 50 per cent of petrol and 30 per cent of diesel in the domestic market.”
“These measures, at a considerable fiscal cost, ensured that not a single retail outlet ran dry and that Indian households saw stable prices,” he said.
Puri said there is no substitute for the world’s second-largest producer (Russia) supplying nearly 10 per cent of global oil. “Those who are pointing fingers ignore this fact. India’s adherence to all international norms prevented a catastrophic USD 200-per-barrel shock.”
PTI
