India to request oil exporters to raise output for price relief

By: |
October 19, 2021 3:45 AM

Crude oil import by India in April-August was 83.8 million tonne, recording an annual rise of 13.2%. Due to increase in global crude oil rates, the value of the import was $42.2 billion, 137% higher than the same period in 2020.

However, the price trajectory started ascending soon after, on global demand rise surpassing supply volumes.However, the price trajectory started ascending soon after, on global demand rise surpassing supply volumes.

In the upcoming international energy event scheduled later this week, India will reiterate its request to oil producing countries to increase their output which will bring down global crude prices, top government officials said. The price of Indian basket of crude is currently at $82.3/barrel, up from $69/barrel in mid-August, supported by global demand recovery and limited production from major oil exporting nations.

Crude oil import by India in April-August was 83.8 million tonne, recording an annual rise of 13.2%. Due to increase in global crude oil rates, the value of the import was $42.2 billion, 137% higher than the same period in 2020.

“Major oil producers have consciously decided to keep supply lower than demand,” an official said requesting anonymity, adding that “prices are likely to go up further till the exporting countries decide to raise output”.

The ‘India Energy Forum’ by CERAWeek is scheduled to begin from Wednesday, and participants include Organization of Petroleum Exporting Countries (OPEC) secretary general Mohammad Sanusi Barkindo, Jennifer M Granholm, secretary of energy of United States department of energy, United Arab Emirates’ (UAE’s) minister of industry and advanced technology Sultan Ahmed Al Jaber, Saudi Arabia’s energy minister Prince Abdulaziz bin Salman Al-Saud, minister of energy and Saad Sherida Al-Kaabi, Qatar’s minister of state for energy affairs.

At present, the prices charged to dealers by oil marketing companies are Rs 44.1 per litre for petrol and Rs 45.8 per litre for diesel. The retail petrol price (in Delhi) is at its all-time high of Rs 105.8/litre and diesel is at Rs 94.7.

The Centre’s tax is currently Rs 32.90/litre for petrol and Rs 31.80/litre for diesel, while Delhi state VAT is Rs 24.3/litre on petrol and Rs 13.8 per litre on diesel. The Centre had cumulatively hiked surcharge and cess on auto fuels by Rs 13 per litre on petrol and Rs 16 a litre on diesel in March and May, 2020, leading to its income from excise duty on auto fuels rising 87.8% annually to Rs 3.4 lakh crore in FY21, despite demand for petrol and diesel falling by 10.6%.

The government has already taken up the issue of high crude oil prices bilaterally with crude oil producing countries and with OPEC for bringing down the prices. Union minister of petroleum and natural gas Hardeep Singh Puri has been communicating the concerns of high crude price with the energy ministers of Saudi Arabia, the UAE, Kuwait, Bahrain and Russia, ministry officials said.

Global crude prices had temporarily corrected in August after the OPEC plus group, in mid-July, agreed to increase crude oil output by 0.4 million barrels per day from August to December-end. However, the price trajectory started ascending soon after, on global demand rise surpassing supply volumes.

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