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An Opec squabble

Photo: ReutersPremium
Photo: Reuters

It’s time for India to relieve fuel products of the heavy tax burden they bear. This would also offer our own central bank some relief on retail prices

It’s an odd world these days. Divisions in the Organization of Petroleum Exporting Countries (Opec) used to be good news for oil importers like us, as dissident quota-exceeding members of this cartel would push its price down. But the latest Opec squabble has sent oil to a multi-year high. Saudi Arabia, the so-called ‘central banker’ of oil, thanks to its output fluidity, had almost got Opec and allies like Russia to jointly supply 2 million more barrels a day from August until December, while extending some production clamps deployed as price props after covid choked oil usage last year. The UAE, keen to sell more than its allotted volume, demurred. Since a Saudi-UAE split meant no deal was struck at all, the group’s supply levels might stay stuck short of rising global demand as normalcy slowly returns to hydrocarbon markets in the West.

Oil-pushed inflation being one of our big worries, it would help if the two Gulf neighbours were to patch up soon. Their once-cosy relations, though, have been fraying lately. Perhaps it’s time for India to relieve fuel products of the heavy tax burden they bear. This would also offer our own central bank some relief on retail prices.

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