MOSCOW (MRC) -- India said Oct. 20 that surging oil prices could potentially create hurdles for a post-pandemic economic recovery, and urged the world's leading producers to take steps to potentially rectify the current supply and demand imbalances, reported S&P Global.
Speaking at the India Energy Forum by CERAWeek, Indian Petroleum Minister Hardeep Singh Puri said the steep rise in prices was a wake-up call that investments need to flow into the oil and gas sector consistently.
"I am sure our friends in OPEC+ will take into account the sentiment voiced in forums like these. We are trying to ensure economic activity, but if high prices undermine that economic activity then economic activity will slow down and demand for oil and gas will also go down," Puri told the India Energy Forum.
Saudi Arabian Energy Minister Prince Abdulaziz bin Salman told the forum that OPEC and its allies do not see any crude oil shortages in the market, dismissing calls from consuming countries to increase supplies to tame rising prices.
Dated Brent prices have more than doubled in the last year, with S&P Global assessing the benchmark at USD85.03/b on Oct. 19.
OPEC+ members are currently adhering to an agreement to increase crude production by 400,000 b/d every month, but key customers, including India, the US and Japan, have complained that the alliance is still holding back too much supply.
"The energy markets today are characterized by imbalances. We need to accept that the world needs reliable supply of oil and gas until we can build new energy infrastructure," Puri said.
India's 2021 oil demand is forecast to grow 295,000 b/d to 4.9 million b/d, which would still be well below 2019 levels. The country is expected to reach a prepandemic level of oil demand in 2022, according to S&P Global Analytics.
Puri said India's crude import bill, which accounts for about 20% of the country's overall import bill, had risen to USD24 billion in the quarter ended June from USD8.8 billion in the same quarter a year earlier.
"Those facts speak for themselves. Due to this extreme volatility, prices of fuels, such as petrol and diesel, have rallied to some of the highest levels in the country," he added.
Domestic gasoline consumption had sharply bounced back to a level higher than even prepandemic levels while diesel was also witnessing robust growth, Puri said.
India's per-capita energy consumption was about one-third the global average, creating the need to invest in building a wide variety of fuels to meet the anticipated growth in consumption, Puri said.
"India is focused on moving towards cleaner energy and developing a gas-based economy, while also achieving the 450 GW renewable energy target by 2030. There will be great dependence on domestic resources, such as biofuels, and moving into energy products, such as green hydrogen," Puri said.
As MRC wrote previously, the Indian company Nayara Energy, 49.13% of which is owned by Russia's largest state oil company - Rosneft, has launched a USD750 million petrochemical development program. Nayara Energy has the second largest refinery in India with a capacity of 20 million tons per year. The Indian company has already launched a refinery development program: within the first stage, it is planned to build units for the production of polypropylene (PP) with a capacity of up to 450,000 tonnes per year.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,638,370 tonnes in the first eight months of 2021, up by 10% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 989,570 tonnes in the first eight months of 2021, up by 30% year on year. Deliveries of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas shipments of injection moulding PP random copolymers decreased significantly.