It’s crude but real

MAJOR oil producing countries and global energy giants on Monday gave a patient hearing to PM Modi’s concerns over the unrelenting surge in global crude prices. The gathering was attended by who’s who of the global oil industry — ministers of Saudi Arabia and UAE and senior executives of Saudi ARAMCO, Abu Dhabi National Oil Company, BP, ExxonMobil and Rosneft. But, don’t expect any relief from rising oil prices if the outcome of previous two such meetings — January 2016 and October 2017 — is taken into account. Their attendance, however, signifies India’s importance for the oil producers because it has already become the world’s third largest fossil fuel consumer and it is expected to remain an assured market for decades to come, especially because the other two top consumers —  the US and China — are energy secured.

It is simple business. No producer would like to offend its biggest customer. It won’t, however, offer any help to its client to make it self-reliant and, thereby, lose an assured market of India’s size. Indian policy makers will hopefully understand this basic business principle and stop seeking investments from global oil giants in the Indian sedimentary basins. This was once understood by former oil minister Mani Shankar Aiyar who tried to form a cartel of oil consuming countries to take on OPEC, the producers’ lobby. Significantly and inexplicably, he lost his job.

India is yet to have an effective integrated energy policy. Its energy diplomacy is knee-jerk and replete with policy patchworks. The Manmohan Singh government had almost dumped its old ally Iran for the India-US Civil Nuclear Deal in 2008. Even after a decade, except for Russia no other country was able to provide even one megawatt of nuclear power! Under pressure, India should not shun its traditional allies such as Iran and Russia and must seek their help in ensuring the country’s energy security. Instead of forcing the ONGC to acquire retailer HPCL, the government should have nudged the oil behemoth to produce more oil and gas. India needs to overhaul its energy policy.