Standing before a BJP gathering in Hyderabad, Prime Minister Narendra Modi made a direct appeal to citizens on Sunday to spend less, save fuel, avoid unnecessary imports and help the country navigate a turbulent global economic phase triggered by the worsening conflict in West Asia.
Concern about crude oil?
The Strait of Hormuz, through which a huge portion of the world’s oil passes every day, has remained partially disrupted for weeks because of the ongoing conflict. The situation worsened after US President Donald Trump rejected Iran’s latest peace proposal. Global crude prices have since climbed above $105 per barrel.
Notably, India imports more than 88% of its crude oil needs. With oil prices rising sharply and the rupee weakening against the dollar, the pressure on the country’s import bill and foreign exchange reserves has intensified.
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“We developed work from home, virtual meetings, video conferencing and many other methods during Corona. We got habituated to them. The need of the hour is to resume those methods,” Modi said.
The Prime Minister also encouraged people to rely more on metro rail networks, carpooling and electric vehicles to reduce petrol and diesel usage.
The government estimates note that India’s fuel import burden has already risen sharply since tensions in West Asia escalated earlier this year. Officials fear that if disruptions in the Strait of Hormuz continue, elevated oil prices could persist for months.
Union Petroleum Minister Hardeep Singh Puri said public sector oil companies are currently absorbing substantial losses to shield consumers from steep fuel price hikes.
‘We have to save foreign exchange by any means’
The Prime Minister also urged Indians to stay away from gold purchases for at least a year. “Gold purchases are another area where foreign exchange is used extensively. In the national interest, we must resolve not to purchase gold for a year,” he argued.
“The growing culture of weddings abroad, travelling abroad and vacationing abroad is becoming prevalent among the middle class. During this crisis, we should postpone travelling abroad for at least a year,” Modi added.
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Traditionally, gold prices rise during wars because investors see bullion as a safe-haven asset. But the present crisis has produced a more complicated picture. Soaring crude prices are fuelling inflation fears globally, prompting expectations that central banks such as the US Federal Reserve may keep interest rates elevated for longer.
That weakens gold’s appeal because bullion does not generate interest or fixed returns. As a result, spot gold prices slipped on Monday after oil prices surged and the US dollar strengthened.
“We have to save foreign exchange by any means,” PM Modi concluded.
