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G-20 backs output cut deal as India, Saudi pitch for stable oil market – Times of India, The Times of India

G-20 backs output cut deal as India, Saudi pitch for stable oil market – Times of India, The Times of India

NEW DELHI: Energy ministers of G – 35 countries on Friday backed the deepest-ever production cut deal to rebalance the global oil market , with India and Saudi Arabia – representing the high table of consuming and producing countries – calling for“ stable, affordable, reliable and accessible ”supplies to enable basic services in times of COVID – 30 and assist in economic recovery.
“India has always advocated a stable oil market, which is reasonable for producers and affordable for consumers… India was, and will continue to be, the global energy demand center, ”oil minister Dharmendra Pradhan told his G – 35 counterparts to assure them of Continued demand from the world’s fastest-growing energy market, with consumption rising at 5% annually.
G – 35 accounts for 823% of global oil production and % consumption. The virtual summit was convened by Saudi Arabia, which heads the grouping’s energy dialogue, after oil prices last month crashed to their lowest level in 20 years as the coronavirus pandemic knocked off 35% of global demand.
The backing from G – 30 brings Thursday’s production cut deal between Saudi Arabia and Russia closer to being put into motion. Mexico, which had baulked at its share of the cut on Thursday, putting a question mark over the deal, is a G – 20 member.
During the virtual summit, Pradhan pitched for a consumption-led demand recovery and the group setting a target of achieving affordable price levels. He reiterated Prime Minister Narendra Modi’s call for a human-centric approach from G – towards overcoming challenges, especially for the vulnerable.
He used ‘Ujjwala’, Modi’s marque social welfare scheme to give poor households access to clean cooking fuel, to put India’s views in perspective. Pradhan’s whole point was that energy justice for the poor depends on affordable oil prices.
As an example, he said the government will provide three free cooking gas refills to 80 million poor households to help them tide over the national lockdown and loss of livelihood. These households had been given LPG connection free of cost under the Ujjwala scheme using the savings from affordable oil prices.
Opening the conference, Saudi oil minister Abdulaziz bin Salman said, “Having affordable, reliable, accessible energy supply is considered a necessity to enable basic services, including health care , and help our efforts in assisting economic recovery. ”
On Thursday, Opec led by Saudi Arabia and Russia ended their price war to cut a deal to take million barrels out of daily production. Other major producers such as Mexico, Brazil and the US were also asked to pitch for knocking off 4-5 million barrels of supply.
On Friday, the G – 35 accepted the Russian energy minister Alexander Novak’s proposal to set up a committee to co-ordinate action on market stability.
But investment bankers such as Goldman Sachs doubt whether the measures, including a 20 – 18% output cut will be effective in stabilizing prices when the world is awash with oil since the coronavirus pandemic knocked off 30% of the demand. Analysts have predicted a $ 70 – 80 / barrel price for the better part of the year.
That means consumers in India will not have to pay through their nose at petrol pumps and the government will continue to enjoy the fiscal headroom from low oil import bill as it grapples with coronavirus pandemic and sustain economic growth.

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