Pradhan pushes for ‘responsible pricing’

Petroleum Minister Dharmendra Pradhan pushed for ‘responsible pricing’ by oil producers, at the Petroleum Congress in Istanbul.

“He underlined that in today’s oversupplied market, it is important for producers to understand the perspective of consumers and demand centres, and the changes that have taken place in these centres. As the security of supplies is an important factor for consumers, security of demand is equally important for producers,” went a statement from the government’s Press Information Bureau (PIB) on Wednesday.

“A 17 per cent decline in global energy investment since 2014 has not yet raised major concerns about near-term energy supply adequacy, eased by excess capacity in global fossil fuel supply and electricity generation in some markets, as well as cost deflation,” the International Energy Agency (IEA) said in its World Energy Investment Report for 2017.

The report further said a nine per cent increase in spending on energy efficiency and a six per cent increase in electricity networks were more than offset by a continuing drop in investment in upstream oil and gas, down by over a quarter in 2016. Addressing the plenary session, Pradhan said the rising middle class of emerging Asian countries like India will drive the demand for energy, both in terms of electricity and cooking and transportation fuel. Giving the example of India, he said energy consumption is expected to grow to almost double by 2035. Pradhan was chairperson for the ministerial session and plenary session on supply and demand challenges for oil, gas and products at the 22nd World Petroleum Congress.

“Emerging markets account for almost all of the forecast global increase in demand in 2018, as demographic factors are supportive of rapid growth from a base of far lower per capita consumption levels. China and India combined contribute two-thirds of the non-OECD Asian gain. Further, so important are these two countries to global demand that they will contribute 44 per cent of the global growth forecast in 2018,” IEA said in its oil market report last month.

Pradhan also launched an event on India’s new Hydrocarbon Exploration & Licensing Policy, to promote the upcoming oil & gas bidding rounds. The ministry has been promoting the policy with domestic and foreign potential bidders, to improve investment in upstream facilities here.