Crude prices have been on the rise and given 85 percent of India's crude supplies depend on imports, MK Surana, chairman and MD of Hindustan Petroleum Corporation Limited (HPCL) told CNBC-TV18’s Anshu Sharma how OMCs are navigating in such a volatile time.

Surana, who was talking on the sidelines on day 1 of the CERAWeek event, the crude price may remain high this quarter due to winter stocking but from next quarter onwards it shall moderate.

He explained that all commodities have moved in tandem and therefore, to some extent coal, gas oil, and all commodities related to energy are globally connected. These factors combined with the pickup of the demand, soaking of inventory, any shock and no cushion to absorb the shock, are giving rise to fluctuations, he said, adding that in the time to come, it should get more moderated.

According to Surana, crude is available is given the number of resources but the prices are very volatile and the rate of change is also quite quick. “Otherwise, prices do go up, prices do come down, but we have seen the swing of $2- $3 also in a day, which is not normal,” he said.

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He said that the transitory phase is driven by a number of factors. Surana pointed to the rate of supply, which is not picking up at the same pace as the rate of demand. It is not that the oil is not available or it cannot be produced, but there are constraints like regulated supply conditions, which is why the rate of pick up of the demand has picked up faster than the supply and that is giving rise to this, he explained.

Surana said that demand will pick up in the festive season and then people would do winter stocking, which can keep the prices high for some time.

“But come January, it should get moderated because then this all run will go, the additional crude will be there, of course, 400,000 barrels per month is anyway OPEC Plus supply to come. There is one more element that not all the OPEC countries are able to produce to their allotted quota right now. So, that is also creating a certain shortfall. But I think the first quarter of 22 the January quarter, we should see some moderation,” Surana said.

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(Edited by : Kanishka Sarkar)