Prime Minister Narendra Modi on Monday urged global oil suppliers to review payment terms so as to provide some relief to a weak rupee. He was addressing oil ministers and chief executives of oil majors at an event in New Delhi.
According to a statement issued after the event, “he requested for review of payment terms so as to provide temporary relief to the local currency.” The rupee has fallen 14.5 per cent this year, making oil and other imports more expensive.
Modi also made a case for a partnership between oil producers and consumers, highlighting how high oil prices might lead to a resource crunch for the major consumers. “The cooperation of the oil-producing countries would be critical to bridging this gap. The PM appealed to oil-producing countries to channel their investible surplus to pursue commercial exploitation in the oil sector in the developing countries,” the government statement said.
The third-biggest oil consumer, India has over the past two months been battered by high crude oil prices that have sent retail petrol, diesel, and liquid petroleum gas rates to record highs, posed inflationary risks, and, together with a sliding rupee, threatened to upset the current account deficit. Also, unrelenting fuel price rise since mid-August has negated cut in taxes and subsidy.
Saudi Arabia assured that there would be no shortage in supply.
Khalid A Al-Falih, energy minister of Saudi Arabia and chairman of the board of Saudi Aramco, said: “We will be looking at consumer-facing sectors such as retail and petrochemicals, building an integrated downstream segment.”
Saudi Aramco, the world’s largest oil producer, is already a part of the Rs 3-trillion West Coast Refinery and Petrochemicals Project. It has also joined Abu Dhabi National Oil Company and formed a joint venture with Indian oil-marketing companies for a 50 per cent stake in the 60-million-tonne Ratnagiri Refinery and Petrochemicals in Maharashtra. This project will be ready by 2022.
Al-Falih said two Saudi energy majors, Sabic in the chemicals sector, and Maaden in phosphates are planning huge investments in India. He also said Saudi Aramco was keen on investing in India’s strategic crude oil reserves project.
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Other global leaders who were part of the meet are BP Chief Executive Officer (CEO) Robert Dudley, Royal Dutch Shell CEO Ben Van Beurden, ExxonMobil CEO Darren Woods, RIL Chairman Mukesh Ambani, and Vedanta Resources founder and Chairman Anil Agarwal.
Responding to Indian Petroleum Minister Dharmendra Pradhan’s claim that rising oil prices were creating problems for consumers, Al-Falih said current prices were balanced.
“We will continue to support the global economy, giving a cushion on pricing for consumers,” Falih said. He added that measures taken by Saudi Arabia and other oil producers had helped in global prices not touching the three-digit mark.
He also said even after a decade, oil and gas would be driving forces of the energy market.
Sultan Ahmed Al Jaber, CEO of Adnoc, said by 2040 India’s fuel demand will increase by 160 per cent. “Even then fossil fuels will remain 80 per cent of India’s oil requirement,” he added.
With inputs from agencies