India voices concern over spiralling global oil prices

India voices concern over spiralling global oil prices

New Delhi: India on Tuesday voiced concern over the rising international oil prices saying the surge posed danger of economic dislocation to developing countries.

“This (rise in oil prices) is a matter of grave concern to all developing countries due to the imminent danger of economic dislocation and its cascading effect on both oil producing and consuming countries," Petroleum Minister Murli Deora said while addressing the 1st India Africa Hydrocarbon Conference here.

India, which imports 73% of its oil needs, has been hit by the surge in international crude oil prices that touched $96 a barrel last week. State-run fuel retailers Indian Oil, Bharat Petroleum and Hindustan Petroleum are currently losing Rs240 crore per day on selling petrol, diesel, domestic LPG and PDS kerosene as the government has not allowed them to raise retail prices in line with the surge in cost.

“As legitimate energy demands of developing countries grow in order to fuel their economic growth, the spare capacity across the global supply chain has been diminishing feed speculative interests in the oil market," he said at the conference jointly organised by Petroleum Ministry and FICCI.

Deora said the greatest challenge today was to provide humankind with its rapidly expanding energy needs in a cost effective and environment-friendly manner.

“Under these trying times, the spectacular oil reserves of Africa are gratifying," he said seeking greater cooperation with the India and energy-rich African nations.

New Delhi is seeking oil and gas fields in nations like Nigeria, Sudan and Egypt to bridge the energy deficit it faces.

"We are committed to ensuring our billion strong nation affordable access to energy. To insulate our economy from the vagaries of the international oil market and inflationary pressures that could arise from transferring the entire price rise to end-users, the Indian government and the national oil companies are absorbing over 85% of the difference between cost of import and domestic oil prices,“ Deora said.

The Petroleum Minister will meet Prime Minister Manmohan Singh on Wednesday to find a solution to the crisis created by rise in international oil prices.

Among the options being explored are a marginal increase in petrol and diesel prices coupled with excise duty cut on auto fuels and customs duty reduction on crude oil.

Indian basket of crude oil touched an all time high of $88.26 per barrel on Monday.

The minister said India was seeking closer cooperation with African nations. “For our mutual benefit, I believe we should institutionalise cooperation between our countries at three levels government to government, company/trade body level and research institution level."