India seeks stable oil market, reasonable pricing for Asian buyers

India’s net crude import bill has increased from $112.1 billion in 2011 to $155.7 billion in last fiscal

The Dollar Business Bureau

Seeking for a “stable” global oil market, India has asked petroleum exporting countries to work out “a responsible and reasonable pricing” system and ensure that the fiscal position of importing countries should not be “unduly stretched”. Addressing the 6th Asian Ministerial Energy Roundtable in Doha, Qatar, Petroleum Minister Dharmendra Pradhan said that affordable energy is the key to ensure inclusive growth. “I believe that an opportune time has now come when this “energy poverty” must give way to “energy justice”. In order to do so, the oil suppliers must make earnest efforts for a responsible & reasonable pricing which will be sustainable,” the Indian minister said. Expressing concern over the implication of the oil price fluctuations on India and other importing countries, Pradhan said that India’s net crude import bill has skyrocketed from $112.1 billion in the financial year 2011 to $155.7 billion in last fiscal. Citing the International Energy Agency’s World Energy Outlook 2014, he said that India‘s oil demand growth between 2013 and 2040 would be the highest in the world—with a CAGR of 3.5 %. As India strives to attain double digit GDP growth rate and strives to become a manufacturing powerhouse, the country is bound to see massive growth in energy demand. This, he said, will reshape the global energy map with Asian countries replacing the OECD countries as a major source of demand. India imports over 60% of its crude oil requirement from the Gulf region. India’s total trade with the 6 GCC countries rose from $ 5.55 billion in 2000-01 to $133.74 billion in 2014-15, which signifies a phenomenal growth of 2300%. Therefore, the Indian minister said, the crude oil price “needs to be more of a win-win proposition for Asian buyers”. “India recognizes the need to ensure that producing nations are not made to suffer uncertainties and revenue loss to wild swings in oil prices. Similarly, consuming nations like India wish to have greater transparency and balance in the oil market to ensure that their fiscal positions are not unduly stretched due to rising prices,” he added. Raising the issue of Asian premium—a tariff system which puts extra cost on the oil import by Asian countries— Pradhan said that it was unjust that reliable and large importers like India pay higher for crude import than the developed Western economies. “In a more reasonable market, it should be the other way round and India should be getting an Asian dividend,” he said, adding, “Large crude importing Asian countries like India can be very reliable destination for oil exports provided the price is reasonable.” He said that Asian economies – both suppliers as well as importers – should forge stronger and strategic ties in the long term interest to ensure growth and stability of the oil market. He also invited foreign investors in India’s oil and gas sector including upstream exploration and production, gas and LNG infrastructure, refining, fuel retailing and marketing. “Within next four months, we will auction about 67 proven marginal fields in India. I would welcome your investment in it,” he said, adding that Indian public and private sector companies are also willing to invest in the entire value chain of oil and gas in your countries. The Roundtable, organized by the governments of Qatar and Thailand in association with the International Energy Forum, was attended by Energy Ministers and high-level delegations from 20 Asian countries and heads of six international organizations. On the sidelines of the event, Pradhan also met Aldo Flores-Quiroga, Secretary General, International Energy Forum (IEF). He also held bilateral meetings with his counterparts from Saudi Arabia, Bangladesh, Russia, UAE, Malaysia and Brunei and discussed possibilities of cooperation.  

November 10, 2015 | 5:10pm IST.

The Dollar Business Bureau - Nov 10, 2015 12:00 IST