New Delhi: India has once again asked the world’s top oil producing nations, including the Organisation of the Petroleum Exporting Countries (OPEC) members, to bring down the crude oil prices to sustainable levels so that it does not hurt the fragile economic recovery of oil consuming nations.
Petroleum and Natural Gas Minister Hardeep Singh Puri said that unless the prices of crude oil are maintained at sustainable levels, it will severely impact the green shoots of global economic recovery.
“The cost of energy should not be allowed to outstrip the paying capacity of consuming nations,” Puri told reporters in New Delhi after a three-day meeting of oil industry leaders, which also included Saudi oil minister and US energy secretary, among others.
In his interaction with media at the close of India Energy Forum CeraWeek organized by IHS Markit, the minister referred to the latest Commodity Markets Outlook by the World Bank, which suggested that the cost of energy should not be allowed to outstrip the paying capacity of consuming nations.
“This imperative needs to be configured by the consuming countries, in planning their production profiles for the future,” he said.
“The World Bank had stated that the surge in energy prices poses significant near-term risks to global inflation and, if sustained, could also weigh on growth in energy-importing countries,” said the minister.
Govt refuses to cut tax on petrol, diesel
Puri, who took charge of the petroleum ministry from Dharmendra Pradhan in July this year, has been grappling with the issue of record high prices of petrol and diesel which have topped Rs 100 a litre in several places.
Despite the risk of political backlash in the upcoming assembly elections in five states, including India’s most populous state Uttar Pradesh, Prime Minister Narendra Modi’s government has consistently refused to cut the excise duty on petrol and diesel.
Read: Oil prices in India will come down soon, assures Hardeep Singh Puri
Several union ministers, including finance minister Nirmala Sitharaman and petroleum minister Hardeep Singh Puri, have defended the government’s decision of not cutting the excise duty on petrol and diesel, saying that the revenue collected from the petroleum sector is being used in several welfare schemes including the Covid vaccination drive and for providing free food-grain to nearly two-third Indians under PM Garib Kalyan Ann Yojana, among others.
In response to a question by ETV Bharat, Puri said the revenue earned by the central government from the petroleum sector was not only meant for vaccination and food grain relief under PM Garib Kalyan Ann Yojana but was used in funding several other schemes such as Ujjwala scheme, Pradhan Mantri Avas Yojana among others. “It is the duty of any government to build roads and provide other facilities and the revenue collected is used for that,” he said.
Collective buying
The petroleum minister said the government was in touch with private refiners for collective buying of crude from the international market as it will give more leverage to the country to negotiate better prices.
Puri said a meeting was convened by the petroleum secretary with private and PSU refiners and private sector companies responded with enthusiasm to the government’s proposal. “I think there will be a favourable outcome,” he said.
In the last five years, India has spent on an average over $100 billion per year on the import of crude oil and gas from abroad.
However, different private and public sector refiners strike separate deals with the suppliers. The government hopes that by joint procurement of oil, it can bargain for a better price in the international market.
