NEW DELHI: With no signs of respite from rising fuel prices, Prime Minister Narendra Modi on Monday urged global oil suppliers to review payment terms to provide a temporary relief to the local currency.
Addressing the CEOs of global and Indian oil and gas firms here on Monday, the PM also warned major oil producers like Saudi Arabia that high crude prices were hurting the economy of consuming countries like India and they should do more to bring down rates to reasonable levels.
Saudi Oil Minister Khalid Al-Falih agreed with Modi’s view on consumer pain due to higher oil prices. Speaking at another event later in the day, he said, “We heard it loud and clear from the PM.”
In view of the Iran sanctions, India has placed higher crude oil order with Saudi to offset the fall in imports.
Modi also expressed displeasure that no new investments were coming to India even though the country implemented all the suggestions made at previous such meetings. An official statement issued after the meeting quoted the PM as syaing that “the oil market is producer-driven and both the quantity and prices are determined by the oil-producing countries.”
India is the world’s third biggest oil consumer with 80 per cent of its requirements met through imports. With the rupee falling nearly 15 per cent this year, oil imports have become costlier for India.
Meanwhile, diesel price continued to rise for the 10th consecutive day on Monday, wiping out all of the `2.50 per litre cut in rates announced earlier this month through excise duty cut and oil company subsidy. Diesel was sold at `75.46 per litre in New Delhi on Monday, one paisa more than the price on October 4, when finance minister Arun Jaitley announced the waiver.
Production cost
Modi point: Saudi Arabia Oil Minister Khalid A Al-Falih, what is your cost of oil production and why are the prices rising so much?
Al-Falih’s response: My cost is very high. If oil price comes down to USD 40-50 a barrel, we will start losing money
Anil Agarwal’s counterpoint: My fields (in Rajasthan) are much worse then the oil-rich ones in Saudi Arabia but my cost is just USD 6 per barrel
(As shared by Vedanta Group chief after the meeting)