Union minister of state for petroleum and natural gas Dharmendra Pradhan said on Monday that for sustainability of the oil markets, we must strike a balance of interest between producers and consumers.
Stating that in June last year in an OPEC event, he had submitted the view point of India on consumption of petroleum products being price sensitive, the minister said there is a genuine issue of affordability for a sizable population in India and other developing countries. Pradhan added that therefore while deciding the pricing aspect of crude oil, it should be factored in that the security of supply must, in turn, be matched by security of demand.
Last week the OPEC countries pledged to reduce their production by 1.2 million barrels a day. Non-OPEC countries also agreed to a production cut to the tune of 0.6 Million barrel per day. The proposed cut caused a surge in oil prices to above US$50 a barrel and speculation is rife that it might go up even further. Pradhan said it is a coincidence that we are meeting immediately after the OPEC decision in India which is a major oil consuming economy.
Taking the example of India, the minister said, “We are already the third largest energy consumer in the World behind the US and China. At 4.3 million barrels per day, although we have a less than 5% share in the World consumption, but our annual consumption growth is far more significant. At 300,000 barrels per day growth, our contribution was about 30% of global growth in demand last year.”
Stating that energy is the most important catalyst for achieving sustained growth, Pradhan said that in the modern world, access to energy should be a fundamental right of each human being. This, he said, is particularly true for India with a rapidly growing economy and huge aspirational population. India is committed to provide reliable and affordable energy, in a time bound manner, to a large proportion of our population which still does not have access to energy, he said at inauguration of Petrotech 2016.
PETROTECH 2016 is the largest ever in terms of participation of above 6,500 delegates including 20 Minister level representatives, Heads of International Oil Organizations, CEOs and Experts. I welcome the Ministers from Afghanistan, Bangladesh, Bhutan, Brazil, Cyprus, Chad, Colombia, Cameroon, Qatar, Iraq, Mauritius, Nepal, Nigeria, Sri Lanka, Sudan, South Sudan, Uganda along with the Secretary General of OPEC, Secretary General of International Energy Forum and President of the International Gas Union.
The Petrotech Exhibition running concurrently has nearly 700 exhibitors from over 50 countries showcasing the latest technology offerings from leading Indian and foreign companies.
Speaking on the theme of the conference, the minister noted that in today’s world, disruption has become a part of life. Thus, it has become imperative that we take time to reflect on the theme of this conference – “Hydrocarbons to fuel the future – Choices and Challenges”. He said the Conference goes beyond oil and gas and covers the overall landscape of energy sector.
“We have conceived PETROTECH as a platform where policy makers, experts, CEOs, regulators and academics can exchange knowledge, expertise and experiences. We live in a globalized world. Therefore, synergy in our efforts is very crucial.”
On India benefiting from the fall in oil prices, Pradhan said he has no hesitation in admitting that the fall in oil prices in last two years came as a timely relief for Indian economy and consumers. This, he said, has helped us to increase penetration of cleaner fuel replacing polluting biomass among the poorer segments of society.
“All of you are familiar with international projections about very high growth rate in Indian energy consumption. This is a healthy aspect of India’s development since the per capita energy consumption figures in India is one among the lowest in the world. I am sure similar is the story in other developing countries. However, higher oil prices will risk this growth trajectory and deprive the underprivileged sections of society from access to energy,” he added.