India asks Opec to price oil ‘reasonably & responsibly’

India on Tuesday asked Opec for a “reasonable and responsible” oil pricing to support developing economies even as the cartel that accounts for 40 per cent of the world output said rates will rebound from around 11-year lows within a year.

At the first institutional dialogue between the world’s fourth-largest oil importer and the Organisation of Petroleum Exporting Countries (Opec), Oil Minister Dharmendra Pradhan gave the cartel a perspective of an importing county and sought moving beyond buyer-seller relationship to a more participative partnership.

“About 85 per cent of our total oil imports and 95 per cent of gas imports come from Opec nations. Opec has a major role in shaping oil prices and availability,” he told reporters after meeting Opec Secretary General Abdullah al-Badri under the India-Opec Dialogue. 

Opec holds such dialogue with major consuming centres like the US, European Union, Russia and China. This was the first such institutional dialogue with India. “We gave him the perspective of major buyer of crude and market. We feel a reasonable and responsible price will best serve the world economy,” he said. Al-Badri on his part said Opec too was “looking for a reasonable price.” The oil cartel, he said, is not targeting a price. “We are not looking at a higher price and not also looking for a lower price. And we are looking for a fair price because we know higher price for a few years is good for producers but will not be good for consumers. And it will be vice-versa.” 

“Low prices, now a lot of people are saying is good for the consumers. (But) it is not good for consumers. The good price for consumer is a price where you can really invest. So what we are looking at is a fair price,” he said. He said during his life he has seen six oil cycles of high and low prices. “This (low oil price) will not continue. Few month or a year or so, you will see this will change.” 

Stating that Opec has not cut production to keep oil prices supplied even though rates have hit 11-year low of less than $35 per barrel, he said fair price means a rate where Opec nations have a decent income. “Also where we can invest, investment to have more supplies to the consumers,” he added.