India asks OPEC to stop charging premium from Asian buyers
The Dollar Business Bureau
India on Monday once again asked the Organisation of Petroleum Exporting Countries (OPEC) to end charging premium from its buyers from Asia and said that the producers would not subsidise other buyers at the expense of nations like India.
Restating India’s demand for long, Oil Minister Dharmendra Pradhan said that the oil cartel OPEC should have to work towards a ‘responsible price’ that would allow key consuming nations to offer energy to their common people.
High prices of oil will force these countries to opt for alternate sources of energy which would slow down the crude oil demand, Pradhan said while addressing the 2nd high-level meeting of OPEC-India Energy Dialogue in Vienna.
“During my last visit to Vienna for the 6th OPEC International Seminar in 2015, I had raised the issue of Asian Dividend not Asian Premium. The issue of Asian Premium still continues to exist. Our companies pay billions of dollars on this account. They still don’t understand the rationale of this cross subsidisation of tariff between West and the East,” he said.
Former Indian Oil Ministers, specifically Mani Shankar Aiyar, in the past had vociferously raised this issue of premium charging with OPEC members from Asian countries but the oil cartel has declined to act on this issue.
Pradhan further said that OPEC should treat its Asian market as major markets. The strategy in the past to incentivise western buyers, at the expense of Asian buyers, didn’t help in retaining these markets.
OPEC have to work towards responsible pricing, he said, while adding that dialogue between consumers and producers of oil would help in better understanding the perspectives of each other.
Pradhan said that India is consistently growing at more than 7% and its energy sector is growing at 7-8%, which is nearly double the rate of several developed markets.
With rising demand as well as consumption, the country is increasing its both imports and refining capacity.
“As of now, India’s refining capacity per year is 235 million tonnes. Out of which, 194 million tonnes is consumed in the domestic market, whereas the remaining is exported. Simultaneously, the country’s energy consumption is likely to grow two-fold in the coming 15 years, he said.
“We are in fact net exporters of gasoline, naptha, jet fuel and gas oil. We are in the process of increasing our refining capacity to around 310 million tonnes by 2023. India is fast becoming a refinery hub,” he added.
In addition, Indian companies are investing around $80 billion in petrochemicals segment in the coming 3-5 years.