Need responsible energy pricing: PM

THE PRIME MINISTER SAID THAT ARTIFICIALLY INFLATING PRICES ARE SELFDESTRUCTIVE AS HISTORY SHOWS

NEW DELHI: India on Wednesday called for a global consensus on “responsible pricing” in the backdrop of rising global oil prices after the Organisation of Petroleum Exporting Countries (Opec) and Russia cut supplies.

Inaugurating the 16th International Energy Forum Ministerial (IEF-16), Prime Minister Narendra Modi said, “We need more responsible pricing which balances the interests of the producers and consumers.”

India’s worry over crude oil prices stems from its energy needs being primarily met through imports, with the country importing 214 million tonnes of crude oil in 2016-17. Extreme volatility has marked crude oil prices, going to a record $147 per barrel in July 2009.

“Artificially inflating prices are self-destructive as history has taught us,” Modi said. This statement comes at a time when the cost of India’s basket of crude, which averaged $47.56 a barrel in 2016-2017, touched $63.80 (average price) in March 2018, according to information from the Petroleum Planning and Analysis Cell.

Experts believe global oil prices will remain firm with Opec looking to extend its cooperation with Russia on production cuts. This assumes significance, given that Opec accounts for around 40% of global production and India is a major Opec consumer.

Saudi Arabia’s energy minister Khalid Al-falih on his part defended the cuts and said that it will not allow a global glut to build up.

“Kingdom is a reliable actor,” Al-falih said, adding that there have been numerous occasions in the past where its spare capacity made the difference between global prosperity and peril.

“As much as I am sympathetic to price tensions, at the same time I am concerned about investments in the upstream sector,” said Al-falih.

India’s diesel price has reached an all-time high and petrol price has registered a peak since September 14 2013, putting pressure on the government to stem the rise.

News agency said that the Centre had reportedly asked oil firms to absorb up to ₹1 per litre increase in gasoline and diesel prices due to rising global crude prices. It also reported that the finance ministry has asked the oil ministry to work out the volume of subsidy payments at different price points in case of a crude oil flare-up.