New Delhi: Prime Minister Narendra Modi Monday warned oil producers like Saudi Arabia that higher crude prices are hurting global economic growth and they should do more to bring down rates to reasonable levels.
At the third annual brainstorming meeting with chief executives of top global and Indian oil and gas companies, Modi flagged concerns of consuming nations like India over high crude oil prices that have already sent retail petrol, diesel and LPG rates to record highs, sources with direct knowledge of the development said.
With Saudi Oil Minister Khalid A Al-Falih listening, the prime minister said crude oil prices at a four-year high was hurting global growth, causing inflation and upsetting budgets of developing countries like India.
Modi also asked chief executives why no new investments in oil and gas exploration and production are coming to India despite the government implementing all the suggestions they made at the previous such meeting, sources said.
Later speaking at the the India Energy Forum, the Saudi oil minister said Modi at the meeting raised issue of "consumer pain" from high crude oil prices.
"We heard it today loud and clear from prime minister (about consumer pain)," Al-Falih said.
He, however, said the "pain" would have been "much louder" but the action by Saudi Arabia, the world's largest exporter of oil, to invest in creating spare capacity has used to cushion price shocks.
"Prime minister cautioned producers like myself not to kill hen that lays golden egg, he said referring to consumers are the golden hen," Al-Falih added.
Speaking at the same conference, Oil Minister Dharmendra Pradhan said India is "facing severe headwinds from rising oil prices" which have risen by 50 percent in dollar terms and 70 percent in rupee term in last one year.
The meeting, which was also attended by Finance Minister Arun Jaitley and NITI Aayog vice chairman Rajiv Kumar, was called to discuss emerging energy scenario particularly ripples from US sanctions on Iran and volatile oil prices threatening growth.
The third annual meeting also deliberated on ways to revive investment in oil and gas exploration and production, sources said.
Modi's first meeting was on January 5, 2016 where suggestions for reforming natural gas prices were made. More than a year later, the government allowed higher natural gas price for yet-to-be-produced fields in difficult areas like deep sea.
In the last edition in October 2017, suggestions were made for giving out equity to foreign and private companies in producing oil and gas fields of state-owned ONGC and OIL. But the plan could not go through in view of strong opposition from Oil and Natural Gas Corp (ONGC).
Sources said BP CEO Bob Dudley, Total head Patrick Fouyane, Reliance Industries Director PMS Prasad and Vedanta chief Anil Agarwal attened the meeting.
The two-hour meeting, coordinated by NITI Aayog, is believed to have focused on challenges most by volatile oil prices and the US sanctions on Iran.
The meeting looked at measures to attract investments and steps for making it easier to do business in India.
Sources said reforms initiated in the last four years in the oil and gas sector, including open acreage policy, pricing reforms and liberalised licensing policy, will be showcased and suggestions would be sought on what more can be done to hasten growth.
The government is looking at private investment to raise domestic oil and gas production, which has stagnated for the last few years while fuel demand has been rising by 5-6 percent annually. India is dependent on imports to meet its 83 percent of the demand and more than half of its natural gas requirements.
The Prime Minister in 2015 had set a target of reducing India's oil dependence by 10 percent to 67 percent (based on import dependence of 77 percent in 2014-15) by 2022. Import dependence has only increased since then and the government is now looking for ways to raise domestic output.