Indian oil minister Veerappa Moily is expected to announce fresh measures to control fuel consumption in India on 16 Septemeber, amid concerns of a US-armed military intervention in Syria.
External Affairs Minister Salman Khurshid confirmed on a news channel that the oil minister is indeed coming up with plans to cut the import bill and stem the currency fall.
"No matter what happens, we will have to cut down on fuel consumption. You can't keep subsiding costs of fuel and not restrict the use of the fuel," Khurshid said.
Moily had recently suggested to Prime Minister Manmohan Singh to increase imports from Iran, as they are paid in rupee and also to save a whopping $ 8.5 billion on the import bill.
He also proposed that fuel stations should be shut down after 8pm, which the PM rejected.
Amid concerns of a rise in global crude oil price, the Indian government is expected to announce a steep hike in diesel prices later this month.
Syria and Ripple Effect
A strike on Syria might lead to an increase in oil prices, but there is bigger production problem in West Asia and Africa which might continue to affect the energy markets.
India, like the US and China, is one of the biggest oil importers in the world. About 80 percent of its oil, which constitutes about 30 percent of its energy needs, is imported. The import bill in the last fiscal year stood at $144 billion, which forms the biggest chunk of its overall import costs. With the measures to be tabled on 16 September, the government wants to cut down the bill by $20 billion.
The growth in the country's oil consumption lowered from 5.1 percent in 2011 to 4.7 percent in 2012. But the oil markets continue to reel under debt in foreign currency. The long-lasting effects of the 2008 economic crisis and the Arab spring left a huge mark on the world's oil market.
In Africa, Libya's crude oil industry is still facing the effects of the 2011 civil war that toppled former dictator Muammar Gaddafi. Reports claim that air strikes at the country's ports and pipelines have slashed oil exports to 80,000 barrels per day (bpd), less than a tenth of Libya's capacity.
Another African country, Nigeria, has been weighed down by oil theft. Its oil production has hit a four-year low. Oil exports are down from about 2.1 million bpd in 2012 to 1.9 million barrels per day (bpd).
Also, the threat of violence in Syria could further spread to West Asia, especially Iraq and Iran, which is the world's third largest exporter of crude oil.