At a time when global oil prices have been on the boil, Prime Minister (PM) Narendra Modi
has asked oil-producing countries
to adopt “responsible pricing”.
On Wednesday, the benchmark Brent crude prices
hit $73.09 a barrel, the highest level since December 2014, after
“We need to move towards responsible pricing that will balance the interests of producers and consumers,” Modi
said in his inaugural address at the 16th International Energy Forum
(IEF) in New Delhi on Wednesday. Transparent pricing of oil and gas
was necessary to serve humanity, as a large number of people still had no access to energy, he said, adding that artificially distorting the price was self-defeating.
It is in the interests of producers that other economies keep growing steadily and rapidly, the PM pointed out. “Use this platform to build a global consensus on responsible pricing that will serve the mutual interest.”
The average crude oil price per barrel of Indian basket in the international market in 2018 is $56.22, against last year’s average price of $47.56
According to the PPAC, the projected price for Brent crude oil for 2018 varies between $60 and $70 per barrel
Modi’s concern emerged as the central narrative at the event when Khalid A Al-Falih, minister of energy and mineral resources of Saudi Arabia, made his comment on the controversial issue of Asian Premium. India has been raising the issue of Asian Premium on global platforms as Asian countries pay up to $6 a barrel more than US or European refiners to West Asian producers.
“We do not price crude on absolute terms of a benchmark crude. It (Asian Premium) is just a method of pricing based on supply and demand and sometimes with more supply we give crude on discount as well,” the minister said.
Citing India’s growth rate of 7 to 8 per cent, Modi
said the country was committed to initiatives linked to climate change and that it was a frontrunner in curbing emissions.
Underscoring the need for energy in an accessible and affordable way, the PM said the launch of an international solar alliance was a move towards that. “Currently, India is the fastest-growing economy. That means our energy consumption
will also increase.”
According to a recent report by the International Energy Agency
(IEA), India and China
would together constitute nearly 50 per cent of the rise in global oil demand
over the next five years. Adding to the debate of clean affordable energy, Petroleum Minister Dharmendra Pradhan
later said India wanted affordability along with market security in the long-term. Echoing the PM’s sentiment, IEA’s Executive Director Fatih Birol
said if prices spiked, it would neither be good for the producers nor the suppliers. He added that a second wave of shale oil revolution was on its way, with the US set to contribute two-thirds of the global oil demand
in the next five years.