Petroleum Minister co-chairs India OPEC Institutional Dialogue at Vienna
Pradhan said that OPEC should work towards responsible pricing, which is important for India for socio-economic and developmental reasons.
Dharmendra Pradhan, the Minister of State (I/C) for Petroleum and Natural Gas, on 22 May 2017 co-chaired the 2nd India-OPEC Institutional Dialogue at the Organization of the Petroleum Exporting Countries (OPEC) headquarters in Vienna, Austria.
Pradhan held a one-to-one meet with secretary General of OPEC Mohammad Sanusi Barkindo. Later, he also discussed bilateral issues of interest at a delegation level dialogue.
Highlighting India’s steps that include timely payments and the honour that India provides to all its contractual commitments, Pradhan demanded acknowledgement through a discount at prices for large volumes that India imports.
He added that for a long time OPEC subsidised western buyers at the cost of Asian buyers. Given the importance of Asian market for OPEC, particularly fast-growing Indian market which stood by OPEC as a reliable and continued customer, Pradhan emphasised on ‘Asian Dividend rather than paying Asian Premium’.
The meeting took place two days prior to the OPEC Ministerial meeting that is scheduled to be held on 25 May 2017. OPEC is a grouping of 13 oil producing nations.
Highlights of the 2nd India-OPEC Institutional Dialogue
• Pradhan highlighted the importance of India – OPEC engagement and discussed the effects of the production cut of 1.8 mbpd by OPEC and non-OPEC countries on the global oil market volatility.
• He informed the chairman that India had been and continued to be a reliable customer of OPEC countries, the only big economy where the demand for crude oil continues to rise each year.
• About 86% if India’s import of crude oil, 70% of natural gas, 95% of LPG are from OPEC countries.
• Underlining the importance of the market, Pradhan reiterated the need to intensify bilateral dialogue to change the nature of engagement from a buyer-seller relationship to an Energy Partnership.
• He called for understanding the perspective of consumers and the demand centres and the changes that have taken place in these demand centres.
• He stressed on the fact that while the security of supplies was important for consuming countries, the security of demand was equally important for producers. In this context, he emphasised the importance of a purposeful and improved dialogue among producer and consumer countries, particularly benefitting India as a fast growing market.
• He reiterated that as a large import destination there should be no ‘Asian Premium’ on the crude supplied to India and Asian buyers.
• During the meeting, the minister Pradhan stressed that the OPEC should work towards “Responsible Pricing” which is important for India for socio-economic and developmental reasons. It would allow India to provide energy to the common and marginalised people who have been deprived of access to energy so far. Higher crude prices would retard growth rate which will result in slowing down the demand for crude oil.
Besides, the minister also informed OPEC about the increasing refining capacity of India and plans for future expansion. He also briefed OPEC about the expanding petrochemical sector in India.
At OPEC headquarters, Pradhan also highlighted the Energy Mix of India that is undergoing major changes with renewables that are coming in use in a big way and pricing of solar energy that comes down to 4 cents per units. He informed the secretary general about a shift in focus of India in terms of solar, biomass, wind, electric vehicles and hybrid cars among others.
Highlighting the shift, he said that the oil industry is at a delicate cross road and higher crude prices will give a further push to renewables.
The Minister also stressed that the OPEC should work towards “Responsible Pricing” which is important for India for socio-economic and developmental reasons. This responsible pricing will allow India to provide energy to the common and marginalised people who have been deprived of access to energy so far.
Higher crude prices would retard growth rate which will result in slowing down the demand for crude oil.
The Minister was accompanied by Secretary for Petroleum and Natural Gas, Indian Ambassador in Vienna and CEOs of seven large refiners of India, both from the public and private sector including IOCL, HPCL, BPCL, MRPL, HMEL, Reliance and Essar. The CEOs also emphasised their points of view during the OPEC meeting.
This was the first time that both public sector and private refiners from India came together to present their common issues, concerns and demands before the OPEC.
It was agreed that India will host the next meeting in 2018.