India Defends Rise in Russian-Oil Purchases

NEW DELHI—India’s finance minister defended the country’s stepped-up purchases of discounted Russian oil, saying the government is simply doing what is best for the economy. “My national interest tells me I should buy it where it is cheaper,” Finance Minister Nirmala Sitharaman said in an interview with The Wall Street Journal. Plus, “I don’t see any sanctions on oil,” she said, pointing out that Western European countries continue to purchase oil, natural gas and fertilizer from Russia The U.S. and its allies have targeted Moscow with a slew of sanctions since Russia invaded Ukraine. The U.S. banned imports of Russian oil in March and the European Union followed suit last month by saying it would phase out the use of most Russian oil over several months. Still, many European countries remain heavily reliant on Russia for oil and gas. India historically has purchased little Russian oil, with only 0.2% of its imports coming from there in the last fiscal year, according to Hardeep Singh Puri, India’s minister of petroleum and natural gas. But New Delhi has sharply increased its purchases of Russian oil this year after securing agreements with Moscow to get it at a discount to market prices. The country bought an average of 1 million barrels a day in June, compared with 30,000 in February, according to Kpler data. That puts India’s purchases at more than a quarter of Europe’s, according to International Energy Agency data. Oil-industry executives say the government has asked them to buy up large quantities of Russian oil at discounted prices, the Journal reported last week. Mr. Puri said there was no coordinated government effort to get Indian oil companies to buy from Russia. “The price goes up, and you’re left with no option,” he said. “You would buy from anywhere.” Mr. Puri said about 60 million people in India go to gas stations every day to fill up their tanks. The Indian government’s main focus, he said, is ensuring that there is enough affordable fuel to keep the country and its economy running. “Our primary responsibility is to make sure that our population, which is increasingly more and more economically active, gets the energy inputs it requires,” Mr. Puri said. India has come under pressure from the U.S. and other Western countries to take a tougher stance against Moscow over the Ukraine war. New Delhi, which has had close ties with Moscow for decades and relies on Russia for nearly half of its arms supplies, has abstained from United Nations votes condemning the war and declined to join sanctions. India has called on both sides to negotiate an end to the war. Ms. Sitharaman said New Delhi hasn’t faced additional pressure from Washington over its increased oil purchases. “It is not as if we are encouraging war,” she said, adding that the country is just putting its interests first. Ms. Sitharaman said India also is taking steps to try to curb inflation, which has hit 7%, she said. That is above the central bank’s threshold of 4%. The government has cut excise taxes to alleviate the burden, which is having some effect on prices, she added. Ms. Sitharaman said the prices of edible oils also have come down since Indonesia removed its export ban on palm oil. “Inflation should only be on the downward trajectory,” she said.