New Delhi: Fuel subsidies and economic growth in India and China are driving global demand for oil, International Energy Agency (IEA) executive director Nobuo Tanaka said.
Click here for a report by Taneesha Kulshreshtha of Mint.
Both the world’s fastest growing economies must “certainly” phase out fuel subsidies, he said. The agency doesn’t see a slowdown in demand for oil in India, China and the West Asia because of their strong economic growth, Tanaka said in New Delhi on Thursday.
China and India continue to consume more oil, driven by power shortages and fuel substitution, Lehman Brothers Holdings Inc. said in a report on 21 July. Declining consumption in developed economies is partly offset by higher fuel demand forecasts for China, India and Iran, the IEA said in a report.
Additions in oil capacities don’t match rising demand and the “market is still very tight”, Tanaka said. IEA, an adviser to 27 industrialized countries, is concerned about high prices which are “a burden on emerging economies”, he said.
Oil rose as high as $104.97 (Rs4,765) a barrel on Thursday after Abdalla El- Badri, secretary general of the Organization of Petroleum Exporting Countries (Opec), called for members to trim an “oversupply” of output by about 500,000 barrels a day. Opec agreed on Wednesday on a total production limit for 11 members of 28.8 million barrels a day, unchanged from the previous targets.