Stop extorting premium from Asian buyers: Pradhan to Opec

India on Monday once again asked oil cartel OPEC to stop charging premium from its Asian buyers saying oil producers should not subsidise others at the expense of countries like India.

Reiterating New Delhi's decade-old demand, Oil Minister Dharmendra Pradhan said OPEC should work towards "responsible price", which would allow major consuming countries to provide energy to the common people.

Higher prices will force them to go for alternate forms of energy which would be slowing down the demand of crude oil, he said in his address at the 2nd high-level meeting of the OPEC-India Energy Dialogue here.

"During my last visit to Vienna for the 6th OPEC International Seminar in 2015, I had raised the issue of 'Asian Dividend not Asian Premium'.

"The issue of Asian Premium still continues to exist. Our companies pay billions of dollars on this account. They still don't understand the rationale of this cross subsidisation of tariff between West and the East," he said.

Pradhan's predecessors, particularly Mani Shankar Aiyar, had in past vociferously raised the issue of OPEC members charging the so-called premium from Asian buyers but the cartel has refused to act on the issue.

OPEC, Pradhan said, should treat Asian markets as primary markets. "It's strategy of incentivising western markets in the past did not result in retaining those markets."

Stating that OPEC member countries are in the business of selling oil and not subsidising it, he said, "don't subsidise others at our expense."

"I urge the OPEC and through you also to non-OPEC countries to purposefully consider this," he said.

The oil cartel, which accounts for over 40 per cent of world's oil supplies, should work towards 'responsible price', he said, adding dialogue between producers and consumers help better understand each other's prescpectives.

Pradhan said India is growing consistently at over 7 per cent and the growth rate in the energy sector is 7-8 per cent, which is double the rate of many developed markets.

With increasing demand and consumption, India is increasing imports and also its refining capacity.

"Today, our annual refining capacity is 235 million tonnes of which 194 million tonnes of products are consumed domestically, while the rest is exported. At the same time our energy consumption is expected to double in the next 15 years.

"We are in fact net exporters of gasoline, naptha, jet fuel and gas oil. We are in the process of increasing our refining capacity to around 310 million tonnes by 2023. India is fast becoming a refinery hub," he said.

The Minister highlighted that the Energy Mix in India is undergoing major changes with renewables coming in a big way and pricing of solar energy coming down to 4 cents per unit. There is also a shift in focus to solar, wind, biomass, Electric Vehicles, Hybrid cars etc. He emphasised that the oil Industry is at a delicate cross road and higher crude prices will give a further push to renewables.

Also, Indian firms are investing about $80 billion in petrochemicals in next three to five years.

On the proposed plan of continued production cut by OPEC and non-OPEC countries, Pradhan said that energy security was a full circle. He said that while the production cut is an attempt to arrest the slide in prices, however, it also has an inherent chance of under investment and consumer's needs not being met in the long run, which is not in the interest of a balanced and healthy global oil and gas market.

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 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.