RBI Warns of Inflation Risks from Rising Oil Import Dependence
In light of global crude oil price volatility, the Reserve Bank of India (RBI) has called for sustained vigilance and policy responsiveness to mitigate inflationary risks for India, a country heavily dependent on crude oil imports. In a paper titled ‘Revisiting the Oil Price and Inflation Nexus in India’ published in its latest Bulletin, the central bank highlighted the need for continuous assessment of both direct and indirect impacts of oil prices on the Indian economy. The RBI noted that while government intervention through taxes, cesses, and regulation of oil marketing companies has helped contain the pass-through of global crude oil price changes to domestic fuel prices, the country’s increasing import reliance could pose long-term inflationary risks. “A 10 percent increase in international crude oil prices could raise India’s headline inflation by around 20 basis points on a contemporaneous basis”, the Reserve Bank of India paper estimated. The paper also underscored that the inflationary effect of oil is not limited to retail fuel prices but extends to input and transportation costs, particularly in the post-deregulation period. This makes oil price dynamics a critical factor in monetary policy formulation, especially for economies like India that are vulnerable to external oil shocks. To reduce dependence and improve energy security, the RBI recommended exploring alternative strategies such as promoting non-fossil energy usage and pursuing regional free trade agreements and bilateral deals with major oil-exporting nations to secure more favourable pricing.
Epsilon Carbon launches LNG fleet to cut freight emissions and boost efficiency
Epsilon Carbon Pvt. Ltd. has launched a fleet of six LNG-powered container trucks for carbon black freight, aiming to reduce emissions and improve supply chain efficiency. The fleet reduces CO₂ emissions by 20–25 per cent compared to conventional diesel trucks. It also cuts nitrogen oxides by up to 90 per cent and nearly eliminates particulate matter emissions. Also read: Envision Energy celebrates 9 years, reveals growth plans Fuel efficiency Additionally, LNG trucks typically achieve 5-10 per cent better fuel efficiency, leading to lower fuel consumption and long-term cost benefits. The company’s LNG-powered fleet is contributing to Scope 3 emission reductions for its tyre customers, allowing them to include sustainability gains in their environmental reporting and carbon accounting. This initiative aligns with Epsilon’s growing focus on value chain decarbonisation and collaborative climate action. Supporting India’s net zero goals Vikram Handa, Managing Director, Epsilon Carbon, said, “India’s road logistics sector moves nearly 70 per cent of domestic freight and plays a critical role in the economy. We believe the future of logistics must be both efficient and environmentally responsible. As a leader in the chemical industry, we are committed to reducing our environmental footprint. The launch of our LNG-powered fleet is a step towards cleaner, smarter freight movement and reflects our continued support for India’s net zero goals by 2070.”
Indian billionaire seeks replacement for Russian oil – Bloomberg
The largest oil refinery owned by Indian billionaire Mukesh Ambani has started looking for an alternative to Russian oil, Bloomberg reports The procurement policy of the Indian company Reliance Industries has come under scrutiny after the EU imposed new restrictions on diesel produced from Russian oil. According to traders, at the end of last week, Reliance purchased Murban oil from Abu Dhabi, a rare purchase for the company. Usually, the company buys cheaper grades, such as Russian Urals and heavy Middle Eastern grades. The purchase of Murban immediately after the sanctions package was introduced indicates a possible change in strategy. According to informed sources, Reliance has started looking for ways to diversify its purchases to reduce its dependence on Russia. So far, Russia remains the company’s largest oil supplier this year. How Reliance profited from war Reliance and other Indian refiners were among the biggest beneficiaries of Moscow’s war against Ukraine. Europe refused to buy Russian oil, which led to lower prices for its supply. Indian companies actively bought cheap oil and processed it into diesel fuel, which they then sold to European customers. According to Kpler, almost half of Reliance’s oil imports this year came from Russia. Exports to Europe and new risks About 20% of Reliance’s total production, including diesel, was exported to Europe. Now, the company is at the center of pressure from a new package of EU sanctions that will come into effect on January 21 next year. Although it is too early to talk about a sharp abandonment of Russian oil, traders note the first signs of a search for alternative suppliers in the Middle East. Reliance will have to find almost 600,000 barrels of oil per day from other suppliers. It is unclear to what extent this will be possible and at what price. India criticized the new EU sanctions. According to Foreign Minister Vikram Misri, a balance must be maintained when imposing secondary sanctions.