High crude oil prices a cause for concern: Oil secy

Crude oil’s climb towards $90 per barrel is a matter of anxiety for India, oil secretary Pankaj Jain has said.

“Whenever prices go up, it does cause anxiety, cause concern,” Jain said. Brent, the international crude benchmark, has risen to $89 per barrel, adding $15 in about four months.

“Does it stop at $90? That’s the matter of anxiety,” Jain said. India is the third-largest importer of crude in the world and imports 88% of its requirements.

The impact of high prices can be gauged only if they are sustained for long, Jain said, adding that if prices stay this way for a month or longer, companies will respond appropriately.

Geopolitics and traditional summer demand were driving up prices, Jain said. An Israeli attack on the Iran embassy in Syria on Monday, which killed some of the senior Iranian military officers, is threatening to widen the conflict in the Middle East.

Fuel prices get a usual boost during summer, helped by increased holiday travel and air conditioning demand.

“Either crude prices go up or cracks go up (in summer). This year so far, crude prices have gone up, cracks haven’t gone up,” Jain said.

India imports about 88% of the crude it consumes. Refiners are expected to regularly align domestic prices of fuel with international rates. After extreme volatility hit the global oil markets in 2022, state oil companies stopped regular revision of prices. They have recently cut retail prices of both petrol and diesel by Rs 2 per litre.

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