Acknowledging that low global prices of crude oil had helped NDA government push LPG among rural India, Petroleum Minister Dharmendra Pradhan on Monday urged OPEC producers to consider the interest of developing consumer countries before formalising their planned cut in output from January.
“For the sustainability of the oil markets, we must strike a balance of interest between producers and consumers…Hence, while deciding the pricing aspect of crude oil, it should be factored in that the security of supply must, in turn, be matched by security of demand,” Pradhan said at bi-annual conference Petrotech.
After ambivalence of more than eight years, members of the Organisation of Petroleum Exporting Countries (OPEC) last Wednesday pledged to reduce their production by 1.2 million barrels a day beginning January 1.
With non-OPEC countries also joining in to cut their output by 0.6 Mbpd, oil prices have jumped nearly 10 percent since.
Pradhan said consumption of petroleum products was price sensitive and there was a genuine issue of affordability for a sizable population in India and other developing countries.
“I have no hesitation to confess that the fall in oil prices in last two years came as a timely relief for Indian economy and consumers. This has helped us to increase penetration of cleaner fuel replacing polluting bio-mass among the poorer segments of society,” he said.
“However, higher oil prices will risk this (consumption) growth trajectory and deprive the underprivileged sections of society from access to energy,” the minister said.
India, the third largest energy consumer in the world, accounts for less than 5 percent share of global consumption but has significant annual consumption growth rate.