India Wants Bigger Oil Price Fall : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread


Monday, 11 September, 2000, 10:34 GMT 11:34 UK India wants bigger oil price fall

India imports most of its petroleum requirements India says it wanted a bigger rise in oil output by Opec members to bring the price of oil down even further.

Reacting to the news that daily production is to increase by 800,000 barrels, Oil and Natural Gas Minister Ram Naik said he hoped it would have a lasting effect on oil prices.

"However, the country would have been happier if the increase was of a larger magnitude considering the already very high prices and the strong demand in the market," he said.

India has so far not raised state-controlled petroleum prices.

Mr Naik said any decision on domestic prices would have to wait the return from the US of Prime Minister Atal Behari Vajpayee and Finance Minister Yashwant Sinha.

Oil prices fell at the start of trading on Monday to $32.20 dollars a barrel from $32.78 at the close on Friday.

Prices are expected to remain weak, following reports that production may be increased again later in the year.

Ministers from Organisation of Petroleum Exporting Countries (Opec) are continuing their talks in Vienna on Monday.

Price drop

The increase in production is expected to take effect from 1 October.

On Monday, Opec ministers said that they may increase output again at a meeting on 12 November.

However, analysts say it is unlikely that prices will drop to the psychologically important $30 a barrel threshold, because of the coming winter in many oil-consuming countries.

Some analysts doubt that prices will fall by much more than $1.50, pointing out that the promised extra oil is already being produced.

India imports about 65% of its petroleum needs and fuels like kerosene and diesel are heavily subsidised by the government.

-- Rachel Gibson (, September 11, 2000

Moderation questions? read the FAQ