Major crude oil importer India is concerned that the rallying oil prices are hurting its economy, and its Petroleum Minister Dharmendra Pradhan reiterated the need for “stable and moderate” prices in a phone conversation with Saudi Arabia’s Energy Minister Khalid al-Falih.
India—which imports around 80 percent of the oil it consumes—has been particularly hurt by the higher oil prices. As Brent Crude prices briefly broke above $80 a barrel on Thursday, gasoline and diesel prices in India surged to a five-year-high, also due to a weakening rupee against the U.S. dollar.
“Minister Pradhan emphasised his desire for stable and moderate prices,” India’s Ministry of Petroleum & Natural Gas said in a statement on Friday, referring to the phone conversation between the Indian and Saudi ministers.
Saudi Arabia is currently India’s second-largest oil supplier after Iraq and ahead of Iran.
In early April, Pradhan said that oil prices at the then-level of $70 a barrel were ‘too high’ for India’s economy, which is a very price-sensitive market.
“I’d be more than happy if the prices are around $50 plus,” the minister said, adding that oil at $80 a barrel would “pinch India in a big way.”
In the talk they had on the phone on Thursday, Saudi minister al-Falih “assured Minister Pradhan that supporting global economic growth is one of the Kingdom’s key goals. He reiterated his commitment towards stable supplies and that the Kingdom together with other producers will ensure availability of adequate supplies to offset any potential shortfalls and ensure that prices remain reasonable,” the official statement from India reads. Related: The Myth Of An Imminent Energy Transition
Meanwhile, Asia’s oil import bill could reach US$1 trillion, likely having a marked negative effect on some economies, with RBC Capital Markets analysts noting that Asian oil consumers are most vulnerable to oil price jumps.
The Asia Pacific accounts for more than a third of global oil consumption, which currently stands at around 100 million barrels daily. At the same time, it produces less than a tenth of global oil, which is the reason for its heightened vulnerability to oil price swings.
By Tsvetana Paraskova for Oilprice.com
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Indian minister asked Saudi minister for lower prices.
Saudi minister assured his counterpart of assured "supplies".
He did not commit anything about prices. Ha ha
Basically the same as asking Oil producers to sell to them way below market value.
India prefers an oil price of $50 a barrel saying that a price of $80 would “pinch India in a big way”. However, none of India’s three biggest crude oil suppliers (Iraq, Saudi Arabia & Iran) are prepared to reduce oil prices by almost 38% from almost $80 to $50 to satisfy the Indian economy.
While the rise of gasoline and diesel prices in India could be mostly blamed on the recent surge in oil prices and partly the weakening rupee against the US dollar, the Indian government could have curtailed such a rise by easing taxes on refined products.
The Indian government made billions of dollars in revenues when oil prices hit even $26 a barrel after the oil crash in 2014 and never passed any of the financial benefits to consumers nor invested part of its windfall from low oil prices in transport infrastructure in crowded cities like Delhi and Bombay. So it is no good complaining over rising oil prices while refraining from taking action to help its own consumers.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
India should not bother about oil prices increase in market as it is squeezing its own people at high prices, nearly 1.25 US Dollar per liter for gasoline. Whatever be the prices, we are there the citizens to suffer in India!
With good regards,
Sam Sunder
moreover Dr Mamdouh G Salameh-- wait for some more days, crude oil price will crash like 2014 due to heavy surge and lower the demand, also wait for some more years,, the case will be reversed. that time please share your thoughts