India, the world’s third-biggest oil consumer, today pressed OPEC nations to move to responsible pricing of oil and gas saying the present rates are far detached from market fundamentals. Speaking at an OPEC seminar here, Pradhan said, often global trade practices in the field of oil and gas are not contributing to energy access and affordability to all.
“Political conditions, sometimes internal and sometimes external, result in reduced output of some countries. We expect from OPEC and its members a commitment to step in (and) more than fill the gap to ensure sustainable prices,” he said.
Stating that current high oil prices dent the economic development of many countries, he said already fragile world economic growth will be at threat if oil prices persist at these levels.
“My fear is – this will lead to energy poverty in many parts of the world,” he said.
Pradhan said the world has for too long seen prices on a roller coaster and interventions which are detached from market fundamentals.
“It is high time to move to responsible pricing, one that balances the interests of both the producer and consumer. We also need to move to transparent and flexible markets for both oil and gas,” he said.
“We often see global trade practices in the field of oil and gas which are not contributing to energy access and affordability and become a hindrance to sustainability. Price of oil and gas have become subject to vagaries of geopolitics,” he added.
The minister said globally crude prices have gone beyond the threshold which can be sustained by the world. “These prices are creating stress throughout global economy, as it is giving pain to us in India.”
The global economic outlook already has threats from trade wars, geopolitical events and fear of instability coming back to the Euro Zone. “The already fragile world economic growth will be at threat if oil prices persist at these levels,” he said.
India, he said, is not in favour of prices as low as USD 30 per barrel but it also does not support the prevailing high price which dent fiscal balance and undermine development process.
“If the world has to grow as a whole, there has to be a mutually supportive relationship between producers and consumers.
“It is in the interests of producers that other economies keep growing steadily and rapidly so as to ensure growing energy markets for themselves. This is the key to energy sustainability. OPEC as the predominant supplier has the responsibility to maintain supply equilibrium.” he said.
The energy vision of Indian government, Pradhan said, stands on four pillars of energy access, efficiency, sustainability and energy security.
“Energy sustainability has to be seen in tandem with the other three pillars for a stable energy future,” he said.
India, he said, has demonstrated very strong commitment to the Paris Agreement and has taken the lead in promoting the International Solar Alliance. In the oil and gas sector, it has decided to migrate to Euro VI emission norm compliant petrol and diesel by April 2020.