New Delhi:India on Wednesday called for a global consensus on “responsible pricing" in the backdrop of rising global oil prices after the Organization of the Petroleum Exporting Countries (Opec) and Russia cut supplies.

Inaugurating the 16th International Energy Forum Ministerial (IEF-16) here, Prime Minister Narendra Modi said, “We need more responsible pricing which balances the interests of the producers and consumers."

India’s worry over crude oil prices stems from its energy needs being primarily met through imports, with the country importing 214 million tonnes of crude oil in 2016-17. Extreme volatility has marked crude oil prices, hitting a record $147 per barrel in July 2009.

“Artificially inflating prices are self-destructing as history has taught us," Modi said.

This statement comes at a time when the cost of India’s basket of crude, which averaged $47.56 a barrel in 2016-2017, touched $63.80 (average price) in March 2018, according to information from the Petroleum Planning and Analysis Cell.

Experts believe global oil prices will remain firm with Opec looking to extend its cooperation with Russia on production cuts. This assumes significance, given that Opec accounts for around 40% of global production and India is one of the major Opec consumers.

Saudi Arabia’s energy minister Khalid Al-Falih on his part defended the cuts and said that it will not allow a global glut to build up.

“Kingdom is a reliable actor," Khalid Al-Falih said, adding that there have been numerous occasions in the past, where its spare capacity made the difference between global prosperity and peril.

“As much as I am sympathetic of price tensions, at the same time I am concerned about investments in the upstream sector," added Al-Falih.

India’s diesel price has reached an all-time high and the petrol price registered its peak since 14 September 2013, putting pressure on the government to stem the rise.

News agency Bloomberg said on Wednesday that the government had reportedly asked oil retailers to absorb up to Rs1 per litre increase in gasoline and diesel prices due to rising global crude prices. It also reported that the finance ministry has asked the oil ministry to work out the volume of subsidy payments at different price points in case of a crude oil flare up.

However, a senior petroleum ministry official requesting anonymity denied any such move.

IOC chairman Sanjiv Singh and HPCL chairman and managing director Mukesh Kumar Surana also said they were unaware about any such price rise absorption move.

In June, India’s three government-run oil marketing companies—Indian Oil Corp. Ltd (IOCL), Bharat Petroleum Corp. Ltd (BPCL) and Hindustan Petroleum Corp. Ltd (HPCL)—introduced dynamic fuel pricing, joining countries such as the US and Australia, where fuel prices change daily depending on global oil price fluctuations.

Lower oil prices had dramatically improved India’s terms of trade in 2015-16, thus boosting India’s gross domestic product (GDP). Any advance in global markets is bound to impact India’s oil import bill and trade deficit.

Experts say that a price increase will in turn trigger a strong response.

Fatih Birol, executive director, International Energy Agency said that in the event of another price hike coming, there will be a strong response from the US shale oil producers, and from those in Africa and Latin America.

“Very high prices are also not in favour of the producers," said Birol who heads the Paris-based agency that has been trying to get large energy consuming nations to act in concert to counter supply disruptions.

Modi added that if the world has to grow, there has to be a mutually supportive relationship between producers and consumers.

He said that the global energy consumption growth has shifted to non-Organisation for Economic Co-operation and Development countries, West Asia and Africa with solar photovoltaic being the most economical of all energy sources.

“This is changing the supply paradigm," said Modi while stating that the US will become a major energy supplier.

Also making a pitch for responsible pricing, petroleum minister Dharmendra Pradhan said, “Affordability is the security of the market."

India registered a record low solar tariff of Rs2.44 per unit in May last year. Also, India is sourcing liquified natural gas and oil from the US. In a milestone for India’s new energy sourcing strategy, the first long-term LNG US cargo from the Houston-based Cheniere Energy Inc. arrived at the Dabhol LNG terminal in Maharashtra last month. Of 22 million tonnes per annum (mtpa) of long-term LNG contracts inked by the Indian firms, 9 mtpa is from the US.

India has also been recalibrating its crude sourcing strategy and sourcing heavy crude from Latin America as part of its strategy to become a preferred refining hub.

Modi also spoke about the growing role of electric vehicles and said, “energy intensity of the economy will change."

India, the biggest emitter of greenhouse gases after the US and China, plans to reduce its carbon footprint by 33-35% from its 2005 levels by 2030, as part of its commitments to the United Nations Framework Convention on Climate Change adopted by 195 countries in Paris in 2015.

India plans to achieve 175 gigawatts (GW) of renewable energy capacity by 2022. Of this 100GW is to come from solar projects. Also, India has been trying to transform its mobility architecture geared towards a mass scale shift to electric vehicles.

“We are entering an era of energy abundance," Modi added.

Falih, who also holds the industry and mineral resources portfolio for Saudi Arabia said that his country had been trying to closely link global supply with demand.