Ironical for PM Modi to call upon global energy producers to ensure ‘responsible pricing policies’

Prime Minister Narendra Modi has called upon the global energy producers to pursue more “responsible pricing policies”, meaning they should keep the prices of crude oil being produced by countries like USA and Saudi Arabia in check to prevent any energy crisis developing in a country like India which does not produce much fuel but whose consumption is huge and is largely dependent on imports.

The Prime Minister had the nerve to say this when oil producing countries were facing such a crisis of lack of demand that some like the US were giving a gallon of petrol in a can and also filling the tank free in any car touching down at a gas station during the early phase of the lockdown. In India too, the demand for petrol, diesel, etc. naturally came down drastically due to the complete lock down for over two months and even today the demand is nowhere near what it was in the pre-lockdown period because the pandemic is showing no signs of receding and is therefore still adversely affecting people’s day to day normal life and mobility as well as industrial production.

The irony is that the Organisation of Petroleum Exporting Countries (OPEC) is faced with a situation wherein they fear that another or perhaps a third lockdown in Europe predicted by experts and analysts, may just force them to close shop. OPEC secretary general Mohammad Sanusi Barkindo told the India Energy Forum on October 27 that “We were hopeful that the second half of 2020 would begin to see a recovery in the global economy and oil demand…there were projections of a V-shaped recovery. Unfortunately, both economic growth as well as demand recovery remain anaemic at the moment, due largely to the virus spread. We remain hopeful that governments around the world, having learned the lessons of what transpired in the second quarter of 2020 and the consequences of the lockdowns on the global economy and society, would try to modify their responses and measures in the event of a second or third wave of infections.”

Petrol in Delhi as of today is at somewhere around Rs 84 a litre. And petrol and diesel rates in Delhi are the lowest compared to anywhere else in the country including the adjoining National Capital Regional (NCR) states UP and Haryana. Perhaps petrol is priced in India higher than any other country and this is not due to international crude price which was $41 to a barrel today and has been hovering around that and even lower throughout the pandemic period. This price we are paying is not what is going to the petrol dealer or even the petroleum companies. The bulk of it is excise duty surcharge and other taxes, meaning it is going directly into the government treasury.

Who would care to remember that when the international crude prices were sky rocketing reaching over a $100 per barrel during the latter half of UPA government of Prime Minister Manmohan Singh and per force the petrol prices went up to around 60 rupees and more per litre, the same Narendra Modi was beating his breast at the common man’s ‘burden’.

Modi’s active campaigner Baba Ramdev was invited to one of Modi’s pet news channels, India TV of Rajat Sharma, an old ABVP associate of Modi since the 1970s, where he claimed that his (meaning Modi’s) government would give petrol at Rs 35 per litre. As luck would have it, soon after Modi became the Prime Minister the crude prices started tumbling and came down even to $25-30 per barrel. But not once did we see the petrol prices in Delhi (and please remember again petrol sells cheapest in Delhi) come to anywhere close to the promised Rs 35 per litre.

Now, Modi tells the oil producing countries and their representative – the OPEC secretary general – at the India Energy Forum that, “India believes that access to energy must be affordable and reliable.” Wonder when the Indian can have access to affordable energy.