Crude oil price of $110 a barrel is not sustainable, Union minister of petroleum and gas Hardeep Singh Puri told the World Economic Forum in Davos on Tuesday.
The Indian basket of crude comprising Oman, Dubai and Brent crude, was last recorded at $110.98 per barrel on 23 May.
As countries around the world struggle with the impact of inflation on disposable income, India’s Commerce Minister Piyush Goyal said on the same WEF panel that food inflation in the South Asian country was at a “manageable level”.
Goyal also said that India was producing enough wheat for domestic consumption, as some countries face shortages due to price rises and problems in getting the grain from major producer Ukraine following Russia’s invasion.
India’s oil production
This comes as official data showed India’s crude oil production fell 1 per cent in April after lower output from fields operated by the private sector wiped away gains by state-owned firms such as ONGC.
India produced 2.47 million tonnes of crude oil in April, down from 2.5 million tonnes in the same month last year, according to data released by the Ministry of Petroleum and Natural Gas.
Oil and Natural Gas Corporation (ONGC) produced 1.65 million tonnes of crude oil in April, which was nearly 5% more than the target set for it and 0.86% high than the 1.63 million tonnes produced last year.
Oil India Ltd (OIL) produced 3.6% more crude at 2,51,460 tonnes but fields operated by the private sector produced 7.5% less crude oil at 5,67,570 tonnes.
The government has been focused on raising domestic production of oil and gas to cut reliance on imports. India imports 85% of its oil needs and about half of its natural gas requirement.
Natural gas output rose 6.6% to 2.82 billion cubic meters on the back of higher output from eastern offshore – home to the KG-D6 block of Reliance Industries Ltd and BP plc.
ONGC produced 1 per cent less natural gas at 1.72 bcm, while eastern offshore output jumped 43 per cent to 0.6 bcm, the data showed.
With demand return, refineries processed 8.5% more crude oil at 21.6 million tonnes in April. Public sector refineries turned 12.8% more crude into fuel, while private and joint sector units’ crude thruput was 1.8% higher.
Meanwhile, the central government announced the reduction in central excise duty on petrol by ₹8 per litre and on diesel by ₹6 per litre on Saturday.
With inputs from agencies.