To counter the oil producers’ cartel, OPEC
who played havoc with prices, Oil Minister Dharmendra Pradhan floated the idea
of forming the oil buyers’ club at the International Energy Forum (IEF) in
April to negotiate better terms with the sellers as well as getting more US
crude oil to Asia to put an end to the dominance of the oil block.
Continuing the effort, Indian Oil Corp
(IOC) Chairman Sanjiv Singh travelled to Beijing this month to meet Wang Yilin,
Chairman of China National Petroleum Corp (CNPC), a top source said.
Production cuts by OPEC have led to
international oil prices hitting a four year high last month that forced a Rs
3.8 per litre hike in petrol and Rs 3.38 a litre increase in diesel prices. Rates
however started to cool towards month end and retail prices have been cut
Attempts on the same line by earlier Oil
Ministers also did not succeed.
Instead of giving discount to bulk
purchasers, the oil producers like Saudi Arabia charged so-called ‘Asian
Premium’ for shipments to Asian buyers. Like producers having a say in the
matter of pricing, the bulk consumers also must have a say which will be
possible if the oil buyers’ club comes into existence; this is the major line
of thinking by Pradhan.
At the 16th IEF ministerial meet in April
this year, India and China, which together accounted for 17 per cent of world
oil consumption last year, agreed to look for ways to leverage the combined
size of their imports for a better bargain from West Asian crude producers.
By 2023, oil demand will hit 104.7 million
barrels per day, up 6.9 million bpd in 2017, according to the International
Energy Agency. "As has been the case for some years, China and India
together will contribute nearly 50 per cent of global oil demand," the agency
had said in a report.