New Delhi: India, which is reeling under the impact of high oil prices, on Tuesday, said that some Organization of the Petroleum Exporting Countries’ (Opec) members have not made good their June decision to increase output by about one million barrels per day (bpd) or about 1% of global supply.

“Opec had promised something in the month of June—there will be an additional production of one million barrels per day after their decision of capping. But according to our information, though Russia and Saudi (Arabia)—the major two contributors of Opec have increased their production but some of the countries are lagging behind," India’s petroleum minister Dharmendra Pradhan said at the India Energy Forum by CERAWeek on Tuesday.

Opec accounts for about 40% of global production and the grouping’s June decision came against the backdrop of calls from the US, China and India to help moderate prices. India has also been reminding Saudi Arabia of Opec’s promise.

The issue was not of “shortfall", but of “sentiment", Pradhan said.

“With that also, there is no issue of availability of crude oil today. But due to some geo-political uncertainty in different parts of world, not only in Iran, there is a sentimental issue. So that’s the primary challenge. We are confident from the day one, I am of this opinion, there is no problem in the sourcing of crude. There is plenty availability of crude in the different parts of the world," Pradhan said.

The minister also clarified about the National Democratic Alliance (NDA) government’s decision earlier this month to effect a 2.50 per litre cut in prices of petrol and diesel to ease inflationary pressure and boost consumer confidence. Out of the 2.50 cut, the Centre has reduced excise duty by 1.50 per litre while state-run fuel retailers will take a hit of 1 for every litre sold.

“The government has no business to interfere in the pricing mechanism of petroleum products. This is day-to-day price mechanism developed by respective companies. So, government has a role in the tax, what we have done last week—10 days ago," Pradhan said.

Opec on its part on Tuesday forecast an imbalance in 2019 because of larger supply growth and said that market is “currently adequately supplied and well-balanced". Also Khalid A. Al-Falih, Saudi Arabia’s energy, industry and mineral resources minister and chairman of world’s biggest oil producer, Saudi Arabian Oil Co (Saudi Aramco) said at the India Energy Forum on Monday that the fundamentals of the current oil markets are “quite balanced."

“Non-fundamental factors, beyond the control of any individual stakeholder, can have a particularly strong influence on our industry. Geopolitical events, natural catastrophes, technological breakthroughs or other critical uncertainties: We are all only too aware of the impact they can have. This has been particularly apparent in recent months," said Mohammad Sanusi Barkindo, secretary general, Opec, at the India Energy Forum.

Growing tensions between the US and Venezuela, the US demanding a global end to imports of Iranian oil by early November, and the rupee being Asia’s worst performing currency, have exacerbated the situation, putting India, the world’s third-largest oil importer, in a spot.

“There have also been concerns expressed by consumers with regard to the outlook for supply, including from some of our friends in India. However, our current view is that the market is currently adequately supplied and well-balanced. For 2019, there is the potential for an imbalance, because of larger growth in supply," said Barkindo, who will attend the third Opec-India dialogue on Wednesday.

India, which is one of the major Opec consumers, has called for a global consensus on “responsible pricing" against the backdrop of rising oil prices after Opec and Russia cut supplies. Also, India has consistently been pitching for a price and terms correction on the so-called Asian premium. With most Asian countries being primarily dependent on West Asia to meet their energy needs, customers from the continent are seen paying the Asian premium as compared to the prices paid by the US or the European Union.

“The interconnectivity of our world means that the only way we can overcome common challenges is through international cooperation and teamwork," said Barkindo.

“Opec is right. Today, everybody has to ensure market stability. This is beneficial for consuming countries. This is equally beneficial for producing countries," said Pradhan.

This also comes at a time of impending sanctions on Iran. India plans to continue its energy imports from Iran despite the US government’s 4 November deadline. India is a top buyer of Iranian oil. Of the 220 million metric tonnes (million MT) of oil imported by India in 2017-18, about 9.4% was from Iran.

“I don’t want to add anything new," Pradhan said about the Iran sanctions. “I have already given my opinion (about) what India’s approach is towards our requirement and we have done something. There is nothing new to say on that," he said.

“We have consciously said what we have done and certainly in this challenging geo-political scenario, we are discussing with everybody," Pradhan said.

Opec is of the view that the primary energy’s global demand is expected to increase by 33% or 91 million barrels oil equivalent per day (mboed) between 2015 and 2040.

“A massive 24% of this anticipated increase will be from India, or 22 mboe/d," Barkindo said. “World oil demand is expected to increase by 14.5 mb/d (million barrels per day), increasing from 97.2 mb/d in 2017 to 111.7 mb/d in 2040. India will account for oil demand growth of 5.8 mb/d, which represents an astonishing 40% of the overall increase," he said.

Also, this will involve a global oil sector investment of around $11 trillion till 2040.

In a separate development, PTI reported that French energy giant Total SA is in discussions with multiple Indian companies to acquire a stake in LNG import terminals and city gas distribution projects and is also interested in setting up petrol pumps in India.

India on Monday also sought a review of payment terms with major oil producers as part of the National Democratic Alliance (NDA) government’s strategy to help counter a depreciating rupee and high global crude oil prices.

The pitch was made by Prime Minister Narendra Modi during his third meeting with top executives of global oil companies and experts from the energy sector.

“Yesterday (Monday) Prime Minister Modi gave an emphatic opinion on one issue. Till now, till today in this industry, the producing country is the primary incharge of how much production will be there, what the price will be. Unless you look into the economic model and affordability of the consuming country, alternative will be there," Pradhan said.

This comes at a time when India has pitched the International Solar Alliance (ISA) as a counterweight to Opec, at the recently concluded first general assembly of the first treaty-based international government organization headquartered in India. Prime Minister Modi had said ISA will play a role similar to that of Opec.

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