New Delhi: India has asked oil cartel Opec to raise crude oil production to stem the relentless rise in international oil prices that have threatened to derail import dependent economies such as India.
Petroleum Minister Murli Deora Tuesday wrote to Saudi Oil Minister Ali al-Naimi seeking a hike in Organisation of Petroleum Exporting Countries (Opec) output ahead of the 22 June meeting of major consumers and producers.
“(I) request you to advice major oil producing countries to raise their output to calm the market further and revitalise the global economic growth,” Deora wrote.
India had earlier this month raised petrol price by Rs5 a litre, diesel by Rs3 and domestic LPG by Rs50 per cylinder potentially fueling inflation rate.
“The world is in the midst of an unprecedented rise in oil prices which have risen from about 29 dollars per barrel in 2000 to touch $139 a barrel in June 2008,” Deora said.
Though the letter was in response to al-Naimi’s invitation for the 22 June meeting in Jeddah, Deora did not spell out if he would be attending the meeting.
“Marco economic conditions and volatile capital markets have simultaneously thrown financial markets into turmoil leading to significant cost pressures from an all round rise in prices of commodities.
“The current high oil prices coupled with the turmoil in the financial markets would seriously impact the economic growth of most countries and in the longer term affect both producers and consumers,” Deora wrote.
The minister complimented Saudi Arabia, the world’s largest oil exporter, for unilaterally deciding to raise production by 300,000 barrels per day and exporting it mainly to Asian market where demand growth is currently the highest.
“These actions would help supply side management and would thus stabilize the current oil market,” he said.
India in 2007-08 paid $68 billion for its crude imports, up from $48.38 billion in 2006-07.
Even after the 4 June price hike and cut in customs and excise duties, state-run firms continue to sell petrol at a loss of Rs13.79 a litre, diesel at Rs23.22 per litre, kerosene at Rs35.98 a litre and LPG at Rs302.99 per cylinder.
Earlier, the Saudi Oil Minister had written to Deora that an objective and constructive dialogue between petroleum producing and consuming nations and the industry was needed in view of the unprecedented volatility in world prices.
“Through frank and honest discussion, producing and consuming nations and the industry have the opportunity to contribute to the greater stability of the world petroleum market and to mitigate any damage to the global economy, especially the economies of developing countries,” he wrote.