On Rising Fuel Prices, India Warns OPEC: 'Keep Crude Oil Rate in Check or Consumers Will Seek Alternatives'
Since India is a price-sensitive nation, the consumers will gradually switch to alternative sources of energy to avoid a long-term burden on their pockets, IOC chief claimed.
New Delhi, July 11: Amid the unprecedented rise in fuel prices, India has issued a stern warning to the Organisation of Petroleum Exporting Countries: Keep crude oil rate in check or brace for a curb in demand as Indian consumers will seek alternatives to petrol and diesel, viz. natural gas-powered or electric vehicles.
The Indian Oil Corporation (IOC), the country's biggest refiner, has asked the OPEC to slash the crude rate at the earliest, apart from adopting a mechanism which does not allow the rate to spiral beyond $83 per barrel till 2025. As per the current trend, market experts claim, the international crude oil rate is expected to cross $85-mark by the onset of 2019.
IOC chairman Sanjiv Singh said the OPEC should not undermine the apprehensions raised by the Indian government. Since India is a price-sensitive nation, he said, the consumers will gradually switch to alternative sources of energy to avoid a long-term burden on their pockets.
Although the adverse impact of price rise is not reflected on demand in the short-run, it is bound to change consumption pattern in the long-run, he said.
Singh claims electric cars and natural gas-powered vehicles could replace nearly 1 million barrels of India's crude - petrol and diesel - consumption by 2025.
Petroleum Minister Dharmendra Pradhan had recently raised the issue of spiralling crude prices at the meet with OPEC representatives last month. Pradhan said the third-world nations, particularly those from Asia, have long-been petitioning the cartel of oil-selling nations to cut down the exorbitant rate at which the prices are rising.
According to the government estimates, the annual oil consumption in India will grow to 40 million barrels till 2014, only if the "crude oil rate is restricted upto $83 per barrel till 2025", and does not crosses $113 per barrel till 2040.
In May, the brent prices had rocketed to $81, a 36 per cent hike since the preceding month. The price rise was attributed to the supply crunch from Canada, Venezuela and Libya.
(The above story first appeared on LatestLY on Jul 11, 2018 09:45 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).