- Friday, April 26, 2024
By: Shubham Ghosh
INDIA on Wednesday (20) warned that high oil prices will hurt the global economic recovery and nudged Saudi Arabia and other OPEC (Organisation of the Petroleum Exporting Countries) members to work towards affordable and reliable supplies.
Prices of petrol and diesel have reached record heights across India following relentless price rise since early May.
“If energy prices remain high, global economic recovery will be undermined,” Indian petroleum and natural gas minister Hardeep Singh Puri said at the India Energy Forum by CERAWeek.
Oil prices around the world fell to $9 a barrel in April 2020 as demand plummeted with most nations clamping lockdowns to control the spread of coronavirus. The demand saw a recovery this year as vaccination drives revived economies. International benchmark Brent crude has since rallied to over $85 per barrel.
According to Puri, this has made fuel expensive and is stoking fears of inflation.
He said India’s oil import bill has jumped from $8.8 billion in June last year to $24 billion this year because of the rise in global prices.
“India believes energy access has to be reliable, affordable and sustainable,” he said, adding that economic recovery after the devastating pandemic has been fragile and it is further being threatened by the soaring prices.
India, which imports almost two-thirds of its oil needs from West Asia, has told crude oil producers, including OPEC, that high oil prices will hasten the transition to alternate fuels and such rates will be counter-productive for the producers.
Puri has in recent weeks flagged the issue of high oil prices to countries like Saudi Arabia, the UAE, Kuwait, Qatar, the US, Russia and Bahrain. He also conveyed New Delhi’s strong preference on responsible and reasonable pricing, which mutually benefits consumers and producers.
The minister said volatility in international prices is only hurting India but also the industrialised nations.
While the world has begun shifting towards cleaner fuels such as electric-powered vehicles and hydrogen, most countries in the world are still dependent on oil to fuel their economies.
India is 85 per cent dependent on imports to meet its oil needs and relies on overseas shipments to meet 55 per cent of the gas needs. It is the only nation in the world that is seeing a rise in demand for oil on a sustained basis and without it, the producers will also suffer.
Indian finance minister Nirmala Sitharaman also recently expressed her concern over rising prices of the crude and said the uncertainty caused by it could ruin some of her plans to get the country’s economy back on track.
Speaking to an international news outlet in an interview, she said, “The challenge I will face, and the teams are also watching in the ministry, is the way the fuel prices are leading to a big crest. This uncertainty is a big element for me, which is still imponderable and I don’t know how much will have to be diverted from other most important considerations, and that’s the challenge I see.”
