India has done the right things, building up strategic oil reserves, wheat and oil buffer stocks, says RBI’s Patra

India, in some ways, has done the right things, including building up strategic reserves of oil and having wheat and rice stocks at or above buffer norms, in the face of the Russia-Ukraine war, said MD Patra, Deputy Governor, Reserve Bank of India.

“...India is resilient to even the war. I will give you a small incident of how topsy-turvy the world has become. You know that there are sanctions against people buying Russian oil. And this was reported to us by US Treasury. It turns out that an Indian ship met a Russian tanker in mid-sea, picked up oil, came to a port in Gujarat, it was processed and converted into a distillate, which actually goes into making single use plastic,” Patra said.

The refined output was put back on the ship and it set sail without a destination, he added.

“In the mid-seas, it received a destination, so it re-charted its course, went to New York and landed its stuff. So, that’s the way war works. It works in strange ways,” Patra said.

Wheat and rice buffer stocks

The Deputy Governor noted that where the world is facing shortages of food — food security has become an issue even in advanced economies, India has buffer stocks. Wheat is at buffer norm and rice is at three times the buffer norm.

“So, in some ways, we have done the right things. The discounted oil has actually built up all our strategic reserves of oil. So, we are better prepared than many other countries. So, we will have to muddle along, but I think, it will not be so difficult,” Patra said.

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