India, the world’s third-largest energy consumer, on Wednesday warned that high oil prices will undermine global economic recovery, and nudged Saudi Arabia and other OPEC nations to work towards affordable and reliable supplies.
Petrol and diesel prices have hit record highs across the country after relentless price increases since May.
“If energy prices remain high, global economic recovery will be undermined,” Petroleum and Natural Gas Minister Hardeep Singh Puri said at the India Energy Forum by CERAWeek.
Global oil prices crashed to $19 per barrel in April 2020 as demand evaporated with most nations clamping lockdowns to control the spread of the novel coronavirus.
Demand recovered this year as vaccination against the infection revived economies worldwide.
International benchmark Brent crude has since rallied to $84 per barrel.
This, he said, had made fuel expensive and was stoking fears of inflation.
Mr. Puri said India’s oil import bill had climbed from $8.8 billion in June 2020 quarter to $24 billion this year because of a spike in global oil prices.
‘Energy access crucial’
“India believes energy access has to be reliable, affordable and sustainable,” he said adding economic recovery after a devastating pandemic had been fragile and it was further being threatened by the high prices.
India, which imports almost two-thirds of its oil needs from West Asia, has told oil producers, including the Organisation of Petroleum Exporting Countries (OPEC), that high crude prices will hasten the transition to alternate fuels and such rates will be counter-productive for the producers.
Mr. Puri has in recent weeks flagged the issue of high oil prices to Saudi Arabia, the UAE, Kuwait, Qatar, the U.S., Russia and Bahrain. He conveyed India’s strong preference for responsible and reasonable pricing, which was mutually beneficial for consumers and producers.
Mr. Puri said volatility in international prices was not just hurting India but also industrialised nations.
While the world had begun the transition towards cleaner fuels such as electric-powered vehicles and hydrogen, most nations were still dependent on oil to fuel their economies. And high oil prices would hurt the recovery in demand.
India is 85% dependent on imports to meet its oil needs.