Finance Minister Pranab Mukherjee on Tuesday said the ongoing turmoil in Middle East and North Africa could impact the price as well as availability of crude oil.
“Uncertainty in the Middle East and North Africa... has its other implications on the energy sources. Substantial quantum of oil is being produced there. Therefore it is not merely the question of highly volatile price, it is also the question of availability,” he said during his reply to the Finance Bill 2011 in the Lok Sabha.
Mr. Mukherjee said the government hopes for the quick return of normalcy in the region, especially Libya, where U.S. and other Western Nations have imposed a no-fly zone and started bombardment of government facilities.
International crude prices had reached a 30-months high $120 per barrel in February following the earlier turmoil in Egypt and Tunisia.
India is in a particularly vulnerable position due to its growing energy needs as the country imports almost 75 per cent of crude oil.
Libya, an OPEC member, is a major oil producer and supplies from the country had been disrupted during the recent week due to fierce fighting between government forces of Muammar Qadhafi and rebels.
Mr. Mukherjee said his budget proposals have factored in the international financial situation, besides the international commodity price situation and the political turmoil in Middle East and North Africa (MENA).
“And from the view point of economy, these three are important,” he said.
Regarding Japan, Mr. Mukherjee said: “Japan is one of the highest investors in direct foreign investment. From the early 1950s Japan used to provide developmental assistance“.