India awaits remaining producers’ reaction to Opec, others output cut

New Delhi, Dec 6 (IANS) With both OPEC and non-OPEC countries deciding to cut oil production from January, which move resulted in a jump in crude prices, India is waiting to see how the remaining producing nations react in order to decide on its import strategy, the government said on Monday.

“I have talked to the Opec (Organisation of Petroleum Exporting Countries) Secretary General today (Tuesday) and have conveyed to him India’s viewpoint that consuming countries’ interests should be kept in mind when they are deciding on issues of output cut and pricing,” Petroleum Minister Dharmendra Pradhan said briefing reporters following a meeting here of the International Energy Forum (IEF)-International Gas Union (IGU) Ministerial Forum.

“Opec and non-Opec countries’ deciding to cut ouput will impact on 40 per cent of the world’s crude countries. We are waiting to see how the remaining 60 per cent of producing countries will move, before deciding on any strategy.

“We have to see the impact of the Opec decision, which will take effect in January,” he added.

At a meeting in Vienna last week, the 13-nation cartel decided to reduce its production by 1.2 million barrels a day, beginning January 1.

With non-Opec countries also agreeing to a production cut of 0.6 million barrels per day, oil prices regained the psychological $50 a barrel level, while “speculation is rife that it might go up even further,” Pradhan had said on Monday at the inauguration of the Petrotech 2016 hydrocarbons conference here.

In reply to a query, Pradhan said that both the Indian oil industry and government were for including oil and gas products within the ambit of the proposed Goods and Services Tax (GST) that would be beneficial for the energy market.

“The decision to include hydrocarbon products is a prerogative of the GST Council. They will be consulting all stakeholders, who will put across their point of view – that of one nation, one tax,” he said.

On the apprehension of a rise in gas prices due to oil output cuts, IGU Secretary General David Carroll said that while the majority of world gas trade is still linked to crude prices, this percentage was declining towards a “decoupling” of the price linkage.

This is because there is now more gas production as well as more liquefied natural gas (LNG) capacity than before, he added.

–IANS

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