India, the world’s third-biggest oil consumer, has been over the past two months battered by high crude oil prices that have sent retail petrol, diesel and LPG rates to record high, posed inflationary risks and together with a sliding rupee threatened to upset its current account deficit. Also, unrelenting fuel price rise since mid-August has negated cut in taxes and subsidy.
With Saudi Arabia Oil Minister Khalid A Al-Falih and a UAE minister listening, Modi at his third annual brainstorming with the chief executives of top global and Indian oil and gas companies underscored how crude oil prices at a four-year high were hurting global growth.
The Indian rupee has fallen 14.5% this year, making imports costlier. The country is over 83% dependent on imports to meet its oil needs.
Later speaking at the India Energy Forum, Saudi Oil Minister said Modi at the meeting raised the issue of “consumer pain” from high crude oil prices.
“We heard it today loud and clear from prime minister (about consumer pain),” Al-Falih said.
“Prime minister cautioned producers like me not to kill the hen that lays the golden egg,” he said referring to consumers are the golden hen.
Oil Minister Dharmendra Pradhan said India is “facing severe headwinds from rising oil prices” which have risen by 50% in dollar terms and 70% in rupee term in the last one year.
The meeting, which was also attended by Finance Minister Arun Jaitley and NITI Aayog vice-chairman Rajiv Kumar, was called to discuss emerging energy scenario particularly ripples from US sanctions on Iran and volatile oil prices threatening global growth.