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Pradhan asks Saudi Arabia for stable, moderate oil prices

Press Trust of India  |  New Delhi 

With global crude prices touching USD 80 a barrel, Oil has pressed kingpin to keep prices stable and moderate, saying that spike in rates would have a negative impact on Indian consumers as well as the economy.

Pradhan conveyed India's concerns when Saudi Arabian of Energy, Industry and Mineral Resources called him last evening "to discuss continued joint cooperation between the two countries and in particular the current oil market situation", an official statement said here.

Brent crude oil, which breached USD 80 a barrel mark yesterday, was trading at USD 79.54 today, the highest level since November 2014.

The rally is being attributed to a combination of factors -- renewed US sanctions on third-largest Iran, shrinking supplies from and the International Agency saying that a global surplus has finally been eliminated due to output cuts by the Organization of Petroleum Exporting Countries and its allies.

"Pradhan expressed his concern about rising prices and its negative impact on consumers and the Indian economy," the statement said. "Pradhan emphasized his desire for stable and moderate prices."

Al-Falih, on his part, assured that supporting global economic growth is one of Saudi Arabia's key goals.

"He reiterated his commitment towards stable supplies and that the Kingdom together with other producers will ensure availability of adequate supplies to offset any potential shortfalls and ensure that prices remain reasonable," the statement added.

The rally in international and a weakening rupee against the US dollar has led to a spike in domestic of petrol and diesel.

Petrol prices have risen by about a rupee per litre since Monday when the state-owned fuel retailers resumed daily revision in after a 19-day pre-poll hiatus. Diesel prices have gone up by Rs 1.15 a litre during this period.

Petrol price was today hiked by 29 paisa, the second steepest increase since daily price revision was introduced in mid-June last year. It costs Rs 76.61 per litre in Delhi, the highest in almost five years.

Diesel rates went up by a similar proportion to take the to its highest ever rate of Rs 67.08 a litre, according to a price notification issued by state-owned firms.

To make up for the almost USD 5 per barrel increase in price of benchmark gasoline (petrol) price since April 24, when the freeze on came into effect, a Rs 4 per litre increase in petrol price is warranted. Of this 98 paisa has already been affected and the remaining is likely to be passed on to consumers in near future.

Similarly, on diesel, the benchmark rate has gone up by USD 4.8 per barrel, necessitating an Rs 3.5-4 a litre increase. Of this, Rs 1.15 has already been affected.

The Saudi updated Pradhan on his ongoing consultations with colleagues from producing countries both inside and outside of OPEC, including Russian Minister and UAE Suhail Al Mazroui, Minister, who is also the of the Conference, the statement said.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, May 18 2018. 14:20 IST