Ahead of a meeting of the Organisation of the Petroleum Exporting Countries (OPEC) and allied countries, India has urged the producing countries to opt for a 'reasonable and responsible' pricing mechanism and also ease the production cuts.
"We need a reasonable price and responsible price of energy," Petroleum Minister Dharmendra Pradhan said, addressing CERAWeek energy summit organised by IHS Markit on March 3. The coalition of 23 countries will be meeting on March 4 to take a call on whether it can relax some of the production cuts that were announced in April 2020.
"For the benefit of all stakeholders, price should be where we can purchase. It should not affect our treasury. Today, we expect OPEC and friends countries to do business as usual as promised," he said.
According to the media reports, OPEC may bring back at least 500,000 barrels a day out of the 7 million barrels of oil, which is still offline. This is around 7 percent of the world supplies. In addition, another 1.5 million barrels will be reintroduced in a phased manner. Saudi Arabia is also expected to take a call on the expiry of its additional 1 million barrel production cut.
"During May 2020, the demand collapsed in the market. We were all supportive of the production cut in those days. At that point in time, producers and OPEC assured the global market that when the demand will be back, production will be as usual. I am sorry to say it is yet to be back to be normal," Pradhan added.
He added that, in an emerging economy like India, prices would naturally increase if there was not enough supply. In Delhi, fuel prices are at a record high with petrol touching Rs 91.17 a litre and diesel at Rs 81.47 a litre.
Pradhan added that India was set to be the new epi-centre of the global energy market and might see an investment of around $143 billion in improving the energy infrastructure.
"We are moving towards a gas-based economy. We will see more pipelines, city gas distribution networks and revival of more fertiliser plants. We need more refining capacity too," he said.
Pradhan indicated that the change of guard at the United States with Joe Biden administration taking charge would further push the bilateral energy partnership between the two countries.
"I see a lot of synergy in technology, hydrogen-based economy and liquefied natural gas. I am confident that we can do more business with the new leadership," he said.