Modi urges oil suppliers to review payment terms to ease rupee woes
15 October 2018
Prime Minister Narendra Modi has urged global oil suppliers to review payment terms in the backdrop of rising crude oil prices and the economic challenges faced by developing countries due to a strong dollar and rising oil prices.
Drawing attention to certain key policy issues relevant to India, including serious resource crunch, Modi said the cooperation of the oil producing countries would be very critical to bridge this gap.
Interacting with the global leaders of the energy sector, the prime minister highlighted the significant positioning of India in the oil and gas market. He noted that the oil market is producer driven; and both the quantity and prices are determined by the oil producing countries. Though there is enough production, the unique features of marketing in the oil sector have pushed up the oil prices.
Prime Minister Modi made a strong case for a partnership between the producers and consumers, in the oil market, as it exists in other markets. This will help stabilise the global economy which is on path of recovery, he said.
"He requested for review of payment terms so as to provide temporary relief to the local currency," a government statement quoted him as saying.
India, which imports more than 80 per cent of its oil imports, has been under pressure as crude oil prices have surged and its rupee currency has lost value.
At the third annual brainstorming meeting, PM 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.
The prime minister 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.
Speaking at the conference, oil minister Dharmendra Pradhan said India is "facing severe headwinds from rising oil prices" which have risen by 50 per cent in dollar terms and 70 per cent in rupee term in last one year.