What did Saudi Arabia say on oil production that India was irritated
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For the past three months, there has been no shortage of tension between India and Saudi Arabia in the relationship between the price of crude oil.
Recently, India’s Oil and Gas Minister Dharmendra Pradhan objected to the statement of Saudi Arabia’s Oil Minister Abdul Aziz bin Salman Al Saud, in which he had said that India should reduce its crude oil prices. Use the oil reserve, which he had bought last year, amidst the falling prices of oil and accumulated it.
Dharmendra Pradhan commented on the statement of the Saudi Arabian oil minister that this statement is not diplomatically correct. He said, “I disagree with such an approach. Certainly India has its own strategy for the use of reserve oil. We are conscious of our interests.”
We will look at the impact of this tension on India-Saudi Arabia relations. Later, let’s first look at how much oil reserves India has and when to use these reserves. How can it be done?
India’s oil reserves
In the Rajya Sabha last month, Dharmendra Pradhan said in a written statement that the Government of India took full advantage of the Strategic Petroleum Reserve in April / May 2020 last year (after the epidemic and lockdown started) to take the Strategic Petroleum Reserve to full capacity Is filled, which has saved about Rs. 5,000 crores.
Actually, the responsibility of the Indian Strategic Petroleum Reserve Limited (ISPRL), a department of the Government of India, is to increase the oil reserves. This department has so far created close to 5.33 million metric tonnes reserves in three places. It has been deposited under the Strategic Petroleum Reserve. These reserve reserves will be enough for about 10 days according to the daily consumption of India. These stores are in Visakhapatnam, Mangaluru and Padur.
The minister also said in his statement that the amount of strategic reserve reserves held by private companies will last 64.5 days according to the country’s requirement. That is, if for some reason India cannot import oil, then its entire reserves can be used for 74 days.
Dharmendra Pradhan said that in the second phase, strategic reserves of 4 million metric tons at Chandikhol in Odisha and 2.5 million metric tons at Padur in Karnataka are being prepared in the second phase, to increase the strategic stock of oil, which can be used for 12 days. can be done
Skyrocketing oil prices in India
Four months ago, OPEC, an organization of oil producing countries, cut production to control the rapidly falling prices of crude oil in international markets since March last year. Saudi Arabia itself also reduced production. Due to this, the price of petrol started increasing again.
Rising prices of petrol and diesel have become a controversial issue in India. On Wednesday, the most expensive petrol was found in Jabalpur and the price was Rs 98.57 per liter.
Petrol and diesel prices in India are linked to international market prices. This means that if the price of oil decreases or increases in the international market, then similar fluctuations should be seen in India. But last year, ordinary consumers did not benefit from the falling prices of oil, because the Modi government increased excise duty twice.
Former chairman of Oil and Natural Gas Corporation Limited (ONGC) RS Sharma says, “When this government came to power in 2014, the price of oil was $ 106 per barrel. Since then prices have been coming down. Our PM Also jokingly said that I am lucky that since I came to power, the oil rates are going down. At that time the price of petrol was Rs 72 per liter. The government did not allow the price in India to be reduced, instead the government Increased excise duty. “
Now this year, the price of crude oil in the international market has increased to $ 71 per barrel and now it is close to $ 64.5 per barrel. Being an important customer of Saudi Arabia in January, the Indian government requested to increase production, but this had no effect on Saudi Arabia.
At that time also there was an atmosphere of tension between the two countries. In March, India demanded from the OPEC countries and Saudi Arabia to increase crude oil production. But once again India did not listen and when India expressed its disappointment on this, the Saudi Arabian minister said that India should use the strategic reserves of crude oil purchased at cheap prices.
Experts say that if India is disappointed with the statement of Saudi Minister, then it is right because when and how any country uses its strategic oil reserves, it is its own internal matter. Secondly, there is an international agreement on the use of strategic reserve, of which India is also a member. Member countries take such decisions according to the rules of this organization.
Petroleum and gas are available in very small quantities in India, so they are imported. The country had to use 85 percent of its expenditure last year for importing petroleum products from abroad, which cost $ 120 billion.
India needs a lot of crude oil for the development of its huge economy. Oil works as a fuel in India for rapid economic development. At present, India supplies 25 percent of its crude oil from other Arab countries, including Saudi Arabia, the world’s largest exporter.
The United States and Russia are also among the big countries that supply large quantities of crude oil to India.
energy policy
Ruling BJP national spokesperson Gopal Krishna Agarwal argues that the time has come for India to reduce its dependence on Gulf countries and meet its needs from Iran and Venezuela. India has stopped importing oil due to US sanctions from both countries. Both countries used to sell huge quantities of oil to India at one time.
Vandana Hari, an Indian-origin energy affairs expert in Singapore, advises that India focus on long-term policies and emphasize clean energy and diversification of energy.
The Modi government intends to launch several schemes for a long-term solution. Prime Minister Narendra Modi, in a speech in Tamil Nadu on 17 February, also emphasized on diversity in energy and reducing dependence on it.
Some experts recommend that India increase its strategic reserve of oil, that is, to increase the stock from 74 days to 90 days. Although the strategic reserve is for emergency time, if the price of oil starts skyrocketing due to disaster or war in the international market, then the stored oil can be used. At this time, America has created the largest such reserves in the world.
India’s third-largest buyer of oil
After the US and China, India imports the most oil. Therefore, the experts emphasize on the need to increase the reserve.
Being a major importer of oil, India has importance at the international level. But if Saudi Arabia does not listen to India at all, experts say that this may have differentiated the recently established close relations between the two countries.
In the last six years, Prime Minister Narendra Modi has visited Saudi Arabia twice, since then, the status of Saudi Arabia has not ceased to be in the eyes of India as an oil-selling country.
Saudi Arabia is looking for investment opportunities in India to reduce its economy’s dependence on oil exports. It has planned to invest 100 billion dollars in India. In December, Saudi Arabia assured India that its investment plans in India were on track. Apart from this, the relationship between the two countries has deepened in military and security matters.
Experts believe that both countries are in dire need of each other. India is the largest buyer of Saudi oil after China, and Saudi Arabia is the largest country to supply crude oil to India, after Iraq. Apart from this, the capital of Saudi Arabia and India’s technology in the energy industry will bind each other with strong threads for many years to come.
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