India will set its eyes on alternative energy if oil producing countries do not fix the supply imbalance that has led to a rise in crude oil prices according to Petroleum Minister Dharmendra Pradhan. Speaking at the CERAWeek conference by IHS Markit, Pradhan said that an artificial shortage has been created by the Organisation of the Petroleum Exporting Countries (OPEC) and its allies at a time when energy demand is resurging in emerging economies.
“During May 2020, demand (for fuels) had collapsed in the market and a country like India was supportive of production cuts in those days. The producers, especially OPEC, had assured us that by the beginning of 2021, demand will be coming back and production will be as usual,” Pradhan said.
“But I am sorry to say, the production is yet to be normal by this time, going by what they have promised,” he said adding, “this is happening when there is a demand normalcy around the globe, especially in Asia. If there is a demand in emerging economies, and you don’t supply properly, (this is leading to) an artificial gap between demand and supply, there is a price rise.”
Brent Crude oil prices have recovered to $ 63.58 a barrel on Thursday after rising from $ 51.09 a barrel at the beginning of the year.
“This may suit some of our friends, but in emerging countries like India, when our fiscal scope is very challenging and we have to spend more on development projects. At that point of time, we need a reasonable and responsible price of energy. If someone will push me, then I’ll be cornered and I will look towards a new path, alternative energy,” Pradhan said.
“So, for balanced growth and benefit of all players, the price should be where we can purchase without affecting our treasury. I am a great advocate of price stabilisation; I am not supportive of a price collapse. At that point of time India supported the production cut, but today we expect the producing countries, especially OPEC and its friends’ (OPEC+) countries should do business as usual, as they have promised. Out of that, a responsible reasonable price will come, which is not the case today,” he added.
Pradhan said that India will continue to have cordial terms with oil producing nations but business with them should be at equal terms. He also said that India and the United States of America (USA) would do more energy business under the Joe Biden administration.
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