Petrol price hike: India urges oil producers to raise output to cut prices

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February 18, 2021 6:00 AM

The price of Indian basket of crude is currently at $62.9/barrel, up from $50/barrel in mid-December, supported by global demand recovery and voluntary production cuts from major oil exporting nations.

However, global prices have surged since then as major producers agreed to reduce production,” Pradhan said.However, global prices have surged since then as major producers agreed to reduce production,” Pradhan said.

Stressing the need for “adopting a balanced approach” to allow demand recovery, Union oil and gas minister Dharmendra Pradhan appealed oil producing countries to increase their output which will bring down global crude prices.

The price of Indian basket of crude is currently at $62.9/barrel, up from $50/barrel in mid-December, supported by global demand recovery and voluntary production cuts from major oil exporting nations.

“I am appealing for easing in production cuts by the key oil exporting countries including the OPEC and OPEC plus group,” Pradhan said, adding that “the key producing countries have not only revised the production cuts over and above the previously announced levels, but also added additional voluntary cuts”. The minister was speaking at a symposium organised jointly by the International Energy Agency, International Energy Forum and the Organisation of the Petroleum Exporting Countries. The energy ministers of Saudi Arabia, Mexico and Nigeria were present in the event.

Owing to lower demand, Indian basket of crude prices were in the range of $19-$44/barrel in the first half of the fiscal, when crude import bill fell 57% annually to $22.5 billion. However, global prices have surged since then as major producers agreed to reduce production,” Pradhan said.

“Time has come once again for allowing the interests of both producing and consuming countries to be promoted,” Pradhan stated, noting that “we need to adopt a balanced approach in this juncture in the spirit of allowing demand recovery to take primacy over crude prices”.

On Wednesday, retail petrol price in Delhi touched an all-time high of Rs 89.54/litre, rising by Rs 4.84/litre since the same day a month ago, as OMCs gradually increased the base-price of the products amid rising international crude prices. The base price comprise 36% of the retail petrol rates in Delhi, while state VAT makes up 23% and central excise account for 37% of the final fuel price paid by the end consumer. Freight charges and dealer commission make up for the rest of the price.

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