NEW DELHI: The Organization of the Petroleum Exporting Countries (Opec) has left the price of oil unchanged for March shipments to Asia, which has four of the world’s top five oil consumers, including India, but raised the rates for the US and Europe.
Oil prices promptly jumped to a year’s high on Friday, closing in on $60 a barrel-mark. At fuel pumps across the country, petrol prices hurtled towards the Rs 100 a litre-mark and diesel scaled new highs as the impact of higher February price for Asia which Opec had announced in January hit home.
India can draw satisfaction over Opec leaving the Asian price unchanged for March since it indicates the group is listening to concerns of consumers. India had reacted sharply to the surprise Saudi offer of an additional production cut on January 5, which sent oil prices soaring.
On Janaury 19, oil minister Dharmendra Pradhan publicly accused Opec of “backtracking” on its “commitment”. With Opec secretary-general Mohammad Barkindo listening, he told an Atlantic Council meeting that such policy contradictions created confusion for consumers.
Pradhan has reasons to feel India’s been left holding the baby. After crude crashed to its lowest-ever in the face of vanishing demand in April 2020, India had stood beside Saudi Arabia to garner G20 backing for the deepest-ever production cut to rebalance the market. It played its role as the third-largest consumer and continued importing shipments even after losing 70% domestic demand.
There’s another reason for India to be happy. In addition to pinching consumers, higher oil prices at this juncture would have forced the government to cut fuel taxes, hurting its ability to revive the economy.