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Stop charging premium from Asian buyers: India to OPEC

Stop charging premium from Asian buyers: India to OPEC

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Stop charging premium from Asian buyers: India to OPECNEW DELHI: Competitive renewable power has triggered a big shift in the energy mix of India, the world’s third largest oil consumer, and any attempt by OPEC to raise crude prices would give another push to clean energy, petroleum minister Dharmendra Pradhan told oil cartel members in Vienna.

Pradhan, accompanied by top executives of Reliance Industries, Essar and state firms such as Indian Oil, Hindustan Petroleum and Bharat Petroleum, urged the cartel to adopt “responsible pricing” of oil and said India’s relationship with cartel members should evolve into an energy partnership instead of dealing merely in buyer-seller terms. The minister was co-chairing the India-OPEC institutional dialogue in Vienna.

India’s renewable energy programme has made impressive strides and helped generate clean electricity at one of the most competitive rates in the world, helped by transparent auctions of projects. India is also planning a large-scale shift to electric cars, helped by indigenous research, which can have drastic implication on oil demand in the country.

“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,” a government statement on Pradhan’s address to OPEC said.

Pradhan told the oil cartel that the rapid advance in renewable energy had significant implications for conventional energy supplies. “The oil industry is at a delicate cross road and higher crude prices will give a further push to renewables,” the official statement said.
Members of the OPEC cartel and other producers are meeting later this week to discuss ways to support oil prices. Crude oil has risen on prospects of the cartel extending production cuts to help oil producers get higher rates.

Pradhan also urged OPEC not to charge the “Asian Premium” — the practice of Gulf suppliers charging Asian customer a higher price than Western buyers for the same grade of oil. Pradhan said India had always paid on time and honoured its contractual commitments, which made a strong case for a discount.
“For a long time OPEC subsidised Western buyers at the cost of Asian buyers. Given the importance of the Asian market for OPEC, particularly the fast growing Indian market which stood by OPEC as a reliable and continued customer, (there should be) an Asian Dividend rather than paying Asian Premium,” the statement said.

Private firms joined hands with state enterprises in articulating India’s view. “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,” the statement said.

Source:ET
Anand Gupta Editor - EQ Int'l Media Network

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