New Delhi: India, the world’s third-biggest oil consumer, pressed OPEC to move to the responsible pricing of oil and gas saying the recent spike in rates are far detached from market fundamentals and are hurting importing nations.
A combination of crude oil climbing to four-year high and rupee dipping to its lowest level against US dollar has sent retail petrol, diesel and cooking gas (LPG) rates to record high. The relentless price rise has wiped away tax cuts done by the government to give relief to consumers.
At the annual institutional dialogue between the world’s third-largest oil importer and the Organisation of Petroleum Exporting Countries (OPEC), Oil Minister Dharmendra Pradhan gave the cartel, which accounts for 45 percent of the world output, a perspective of an importing country.
India imports over 83 percent of its crude oil needs. Of the crude oil imported, about 85 percent of comes from OPEC nations. Also, 80 percent of gas imports come from those countries.
India believes OPEC has a major role in shaping oil prices and availability and the current high oil prices dent the economic development of many countries and threaten already fragile world economic growth.
The OPEC secretary general said Saudi Arabia, the world’s largest oil exporter, and the organization’s kingpin, has assured that it is “committed, capable and willing” to ensure there will be no shortage in the oil market.
The government had on October 5 cut excise duty on petrol and diesel by Rs 1.50 per liter and asked oil PSUs to subsidize the two fuel by another Re 1. The twin move resulted in retail rates being cut by Rs 2.50 per liter.
However, the relentless price hike has wiped away all cut benefits on diesel and most on petrol.
Since the duty cut, diesel prices have risen by Rs 2.74 per liter, more than wiping away the excise duty cut and oil firm subsidy. Petrol price has during the period risen by Rs 1.33 per liter.
Before the October 5 price cut, petrol in Delhi had hit an all-time high of Rs 84 per liter and diesel was at record Rs 75.45. This came down to Rs 81.50 per liter for petrol and Rs 72.95 in case of diesel on October 4.
In Mumbai, petrol on Tuesday was priced at Rs 88.29 per liter, down from a peak of Rs 91.34 hit on October 4. A liter of diesel in the city costs Rs 79.35, a shade lower than Rs 80.10 record high hit on October 4.