Pradhan additionally mentioned that India favours affordable prices that give some house to the producer nations.
“We have to have a reasonable price. India is a major consumer. But at this juncture, India’s viewpoint is the price should be reasonable and responsible. Very low prices are not the answer. Reasonable prices are the answer,” he mentioned.
Speaking within the newest version of the CERAWeek Conversations sequence, he mentioned, “Oil prices should give some space to the producer countries. It should be profitable for them; it should be viable for them.”
The transcript of his tackle was supplied by the organiser, IHS Markit.
His views come days after worldwide oil prices plunged to USD 18.10 a barrel, its lowest since November 2001. Rates have since rebounded to round USD 30 per barrel.
On longer-term power coverage priorities following nationwide lockdowns, he mentioned, “We are moving towards a new gas policy, a new tariff policy. We are planning for a gas exchange very soon and we will be liberalising our distribution mechanisms.”
Natural gas prices in India have fallen to their lowest in additional than a decade, resulting in producers like ONGC incurring losses in companies.
Prices of pure gas — that’s used to supply fertilisers, generate electrical energy and will get transformed into CNG to be used in vehicles and piped pure gas for family cooking — had been from April 1 minimize to USD 2.39 per million British thermal unit — a price about 37 per cent decrease than the price of manufacturing.
Pradhan didn’t elaborate on the coverage reforms deliberate.
The BJP-led authorities had in October 2014 advanced a new pricing method utilizing charges prevalent in gas surplus nations just like the US, Canada and Russia to find out the value in a web importing nation. Prices utilizing this method are calculated semi-annually.
He had in a written reply to a query within the Lok Sabha on March 20, 2017, had said that the price of manufacturing of pure gas within the prolific Krishna Godavari basin is within the vary of USD 4.99 -7.30 per mmBtu. The identical for different basins is within the vary of USD 3.80 -6.59 per mmBtu, he had mentioned.
In the CERAWeek Conversations, Pradhan on Friday mentioned the federal government was trying to push for metropolis gas enlargement as soon as the nationwide lockdown imposed to curb the unfold of coronavirus is lifted.
“We are very much focussed, after relaxing this lockdown, on the job of implementing the city gas distribution network expansion. It will give two things. One, it will create a long-term futuristic energy infrastructure in the majority of the country. Two, at this juncture we need more job opportunities, more employment generation and this is a perfect plan for our gas expansion story,” he mentioned.
He mentioned the federal government has for the reason that previous few weeks determined to start out financial actions in phases, starting with industrial actions within the rural areas.
“And gradually we are edging out from the lockdown. Our demand is picking up,” he mentioned.
Oil refiners, he mentioned, are dealing with extreme stock loss resulting from a fall in prices.
“There’s a market loss (due to lockdown evaporating consumption) and an inventory loss for our oil companies,” he mentioned.
Pradhan mentioned whereas there was an enormous fall in demand, there was no disruption within the provide chain.
India, he mentioned, used the low oil prices to fill its strategic reserves.
“India has 5.3 million tonnes of strategic storage capacity. By mid-May it will be full,” he mentioned. “Apart from that our companies have 7 million tonnes of floating oil in their contracts. We have booked them, we have purchased them.”
Besides, refiners have 25 million tonnes of crude oil and product storage.
“Put together, we have nearly 38 million tonnes of product and crude oil storage facilities. This is around 18 per cent of our annual requirement of energy. This is the maximum capacity we could hold and we are holding that,” he mentioned.