High oil prices pose challenge to economic revival in many countries: Puri

Surging oil prices could hinder the economic recovery of many nations by curbing demand, warned Petroleum and Natural Gas Minister Hardeep Singh Puri on Wednesday. Notably, Brent crude prices hovered over $90 per barrel for the majority of September. The ongoing crisis in Israel might cause them to surpass this level once more.

Addressing the 14th iteration of KPMG’s Innovation and Energy Conclave, Puri underscored the need to consider the concerns of oil-importing countries, particularly significant purchasers. He has previously cautioned that prices reaching $100 per barrel could trigger broad economic upheaval. As of Wednesday evening, Brent crude was priced at $86.64 per barrel, marking a decline of nearly 1 per cent.

"In my view, half the world is grappling with a recession, while the rest teeters on the brink. The International Monetary Fund estimates India's growth rate at 6.3 per cent, though I anticipate it could be higher. However, several crucial countries, which collectively influence global growth evaluations, display troubling trends," he observed.

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For India, the affordability of oil is paramount, given that the country's energy demand growth rate triples the global average, Puri noted. The Organization of the Petroleum Exporting Countries (OPEC) projected on Monday that India's primary energy demand would more than double, reaching 38.5 million barrels of oil equivalent per day by 2045.

Regarding the escalating conflict in Israel, Puri stated that the government is closely monitoring the developments. "The situation between Hamas and Israel appears to be intensifying. Global markets will account for various factors. If the supply chains remain unaffected, we can manoeuvre through the challenges," he added.

Furthermore, the Petroleum & Natural Gas Ministry has instructed public sector undertakings in the oil and gas sectors to champion start-ups in areas such as the internet of things, business digitalisation, green fuels, and alternative energy. Puri highlighted, "Oil and gas sector PSUs have amassed startup funds totalling Rs. 405 crore. They have financed 232 startups, disbursing Rs. 208 crore in total."