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India, the world’ third largest oil importer on Thursday flagged its concerns over the increasing global crude oil prices and its impact on consuming nations with Organization of the Petroleum Exporting Countries (Opec).

India’ concern was articulated by petroleum and natural gas minister Dharmendra Pradhan during his meeting with Opec’ Secretary General Mohammed Sanusi Barkindo wherein reiterated his request of phasing out production cuts.

This assumes importance that the Opec grouping accounts for a major part of India’s crude oil imports and around 40% of global production. The Opec-plus arrangement comprising of 23 countries including Russia and allies have cut production, resulting in a global rally in crude oil prices.

India is witnessing an upward trajectory of transportation fuel prices, with diesel and petrol prices having already breached the 100 mark in several parts of India.

“Shri Pradhan flagged concerns over the increasing crude oil prices and its impact on consumers as well as on smart economic recovery. He emphasised that high crude prices is adding significant inflationary pressure on India," India’ petroleum and natural gas ministry said in a statement.

India is particularly vulnerable as any increase in global prices can affect its import bill, stoke inflation and widen trade deficit. Following the covid outbreak, crude prices for Indian basket of crude had plunged to $19.90 in April last year during the first wave before recovering to $66.95 a barrel in May, data from the Petroleum Planning and Analysis Cell showed.

“Shri Pradhan reiterated his request of phasing out production cuts and also emphasised that crude prices should remain within a reasonable band, which will be in the collective interests of both consumers & producers and will encourage a consumption-led recovery," the statement added.

This comes in the backdrop of the Indian government working on diversifying the country’s energy basket with crude oil supplies from non-Opec sources. India has said that it will source crude oil from any country, that offers cheaper and favourable terms.

Global crude oil prices are expected to be in the $75-80 per barrel range till September, Care Ratings said in a report on Thursday. India had earlier expressed its displeasure to Opec for ‘backtracking’ on its commitments. Saudi Arabia on its part had asked India to use the crude oil bought at low prices and stored in its strategic crude oil reserves.

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