Amid Opec snub, Saudi Arabia asks India to use cheap oil it bought last year

Agencies
March 5, 2021

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New Delhi, Mar 5: International oil prices rose after Opec and its allies ignored India's plea to ease production control, with Saudi Arabia asking New Delhi to instead use oil it bought at rock bottom rates last year.

Brent crude, the most widely used benchmark, on Friday rose nearly 1 per cent to $67.44 a barrel after the Organization of the Petroleum Exporting Countries (Opec) and its allies, a group known as Opec, agreed not to increase supplies in April awaiting more substantial recovery in demand.

India's oil minister Dharmendra Pradhan had in the run-up to Thursday's Opec meeting urged the producers' group to ease production curbs to fulfil their promise of stable oil prices.

He felt rising international oil prices were hurting economic recovery and demand.

Responding to a question on India's pleas, Saudi energy minister Prince Abdulaziz bin Salman at a press conference after the OPEC+ decision on Thursday said New Delhi should take some of the crude out of storage that they had purchased at very cheap rates last year.

"With regard to India, very simple. I would ask my friend that he withdraw some of the cheap oil that they bought in April, May and June (last year)," the Saudi minister said. "There is an opportunity cost for not withdrawing it now."

India had purchased 16.71 million barrels of crude in April-May, 2020 and filled all the three Strategic Petroleum Reserves created at Visakhapatnam in Andhra Pradesh and Mangalore and Padur in Karnataka. The average cost of that crude purchase was $19 per barrel, according to Pradhan's written reply to a question in the Rajya Sabha on September 21, 2020.

Retail petrol and diesel prices, which already are at historic highs, should rise if the oil companies decide to pass on the surge in international oil prices to consumers.

Petrol and diesel prices have remained unchanged for the last five years and oil companies have in past not revised prices in the run to crucial assembly elections in 2017 and 2018 ahead of elections in states like Uttar Pradesh and Gujarat.

West Bengal, Tamil Nadu, Kerala, Pondicherry and Assam will go to the polls in the next few weeks.

Earlier this week, Pradhan had said India, where fuel demand is recovering to pre-pandemic levels, wants reasonable and responsible oil prices.

India, the world's third-biggest oil importer and consumer, had supported the decision of the oil producers' cartel Opec and its allies to cut production last year in view of the oil demand collapsing due to the spread of Covid-19.

"At that point in time, the producers especially Opec assured the global market, that by the beginning of the 2021 demand will be coming back and production will be as usual. But I am sorry to say the production is yet to be normal," he said. "If you do not supply properly if there is a gap in demand and supply artificially (created), there is a price rise."

The average price of crude oil India imports was less than $50 per barrel between April and December 2020 and comparable to 2019-20 average rate of $60.47 in months thereafter but petrol and diesel prices are at historic highs now as the government has so far not rolled back the taxes it levied when prices plummeted almost a year back.

The record taxes coupled with international rates returning to pre-Covid levels on resurrecting demand have meant that petrol has crossed Rs 100 mark in some places in Rajasthan, Madhya Pradesh and Maharashtra.

Excise duty was raised by Rs 13 and Rs 16 per litre on petrol and diesel between March 2020 and May 2020 and now accounts for more than one-third of the Rs 91.17 a litre price of petrol in Delhi and 40 per cent of Rs 81.47 per litre rate of diesel.

'Excise duty on petrol, diesel can be reduced by Rs 8.5 a litre without hurting revenues'

The basket of crude oil India imported in February averaged $61.22 per barrel and $54.79 in January this year. It had fallen to $19.90 in April last year and was between $40 and $49 during June and December.

India imports about 85 per cent of its oil needs and local retail rates are benchmarked to international prices.

Opec+, which is currently reining in about 7 million barrels per day of production -- about 7 per cent of pre-pandemic supply -- has helped engineer a nearly 80 per cent rise in the Dated Brent benchmark since November. Saudi Arabia has taken a voluntary extra 1 million bpd production cut in February and March.

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News Network
March 29,2024

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Dozens of people have lost their lives and sustained injuries when Israeli military aircraft carried out a string of aerial assaults on targets near the northwestern Syrian city of Aleppo, according to Syrian officials.

Citing an unnamed military source, Syria’s official news agency SANA reported that “the Israeli enemy launched an aerial attack at approximately 1:45 a.m. local time on Friday (March 29) from the direction of Athriya, southeast of Aleppo.”

It added that “civilians and military personnel” had been killed and wounded in the strikes.

SANA noted that Israeli drone strikes had targeted civilians in Aleppo and its suburbs. It did not give an exact number for the casualties.

Two security sources said the strikes on Aleppo early on Friday killed 33 civilians and military personnel.

There was no immediate statement from Israeli officials on the strikes.

Aleppo, Syria's largest city and once its commercial center, has come under such attacks in the past that led to the closure of its international airport. Friday's strike did not affect the airport.

On Thursday evening, Syrian media outlets reported Israeli airstrikes near the capital Damascus saying it wounded two civilians.

The Israeli regime often conducts airstrikes on military installations in Syria, particularly those belonging to the Lebanese resistance group Hezbollah.

Hezbollah has been instrumental in supporting the Syrian army in its battle against terrorists backed by foreign entities.

The Tel Aviv regime does not acknowledge its military actions within Syrian territories, which is widely interpreted as a knee-jerk reaction to the Syrian government’s triumph over terrorism.

Since the onset of foreign-backed militancy in Syria in 2011, the Israeli regime has stood as a staunch supporter of terrorist factions that are in opposition to the democratically-elected leadership of President Bashar al-Assad.

The recent strikes also come amid an upsurge in Israel’s acts of aggression against Syria and its ongoing genocidal war against Palestinians in the Gaza Strip which has killed at least 32,552 Palestinians, most of them women and children.

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News Network
March 26,2024

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There is no let-up in the Israeli aggression on the Gaza Strip despite a UN Security Council resolution demanding an “immediate ceasefire.”

Israel carried out air raids and artillery strikes on several parts of Gaza on Tuesday, hitting residential buildings and gatherings of displaced people, “killing and wounding hundreds of people”, the Palestinian Information Center said.

Among the victims are 15 people, including four women and children, who were killed in an attack on a house in the neighborhood of Mosbeh, north of Rafah.

Media reports also said that fighting on the ground continued unabated.

That’s while the UN Security Council on Monday adopted a resolution for an “immediate ceasefire” for the ongoing Muslim holy month of Ramadan.

The resolution was put forward by the 10 non-permanent members of the UN Security Council. The US abstained and the 14 other council members all voted in favor of it.

After the vote, UN Secretary-General Antonio Guterres wrote on social media platform X that failing to implement the resolution “would be unforgivable.”

Palestinian resistance movements have welcomed the resolution, but Israel’s minister for military affairs Yoav Gallant said Israel will not stop its attacks in Gaza. 

“We will operate against Hamas everywhere – including in places where we have not yet been,” Gallant said.

Israel’s foreign minister, Israel Katz, also said in a post on X that the attacks will continue until all the captives taken by Hamas during its October 7 blitz are released.

Israel unleashed its war on Gaza on October 7 after the Palestinian Hamas resistance group carried out Operation Al-Aqsa Storm against the usurping entity in retaliation for its intensified atrocities against the Palestinian people.

Since the start of the offensive, the Tel Aviv regime has killed more than 32,300 Palestinians and injured over 74,000 others.

The Tel Aviv regime has also imposed a “complete siege” on the territory, cutting off fuel, electricity, food, and water to the more than two million Palestinians living there.

Francesca Albanese, the UN special rapporteur on human rights in the Palestinian territories, said Israel has committed acts of genocide in Gaza.

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News Network
March 29,2024

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The Income Tax department has issued a notice of approximately Rs 1,700 crore to the Congress party, exacerbating its financial concerns ahead of the crucial 2024 Lok Sabha elections, multiple reports revealed on Friday.

The development comes after the Delhi High Court rejected the party's plea challenging reassessment proceedings for four assessment years.

The new demand pertains to assessment years 2017-18 to 2020-21 and includes penalties and interest. The Congress party now awaits reassessment for three other assessment years, expected to conclude by Sunday, the stipulated deadline, said a report.

Congress lawyer and RS MP Vivek Tankha alleged that the fresh notice of nearly Rs 1,700 crore was served on the party on Thursday without key accompanying documents.

"We received the demand notice without assessment orders. The govt appeared keener to serve us with demand rather than issue us reasons for reassessment," a news paper quoted Tankha as saying. He further added, "this is how the main opposition party is being strangled financially, and that too during the Lok Sabha elections".

Delhi HC rejects plea

The Delhi High Court, on Thursday, dismissed petitions filed by the Congress challenging the initiation of tax reassessment proceedings spanning four years by tax authorities. Justices Yashwant Varma and Purushaindra Kumar Kaurav, comprising the bench, stated that the pleas were rejected in line with their earlier decision to abstain from intervening in the reopening of reassessment for an additional year.

The subject matter of the case pertained to assessment years from 2017 to 2021.

In a previous petition dismissed the week before, the Congress party had contested the initiation of reassessment proceedings concerning assessment years 2014-15 to 2016-17.

The High Court dismissed the plea, citing that the tax authority had prima facie gathered "substantial and concrete" evidence warranting further scrutiny. The tax department alleged that approximately Rs 520 crore had evaded assessment during these three years.

Additionally, the department revealed that searches conducted on entities, including some purportedly linked to Karnataka deputy chief minister D K Shivakumar and a company in Surat, had uncovered cash transactions involving Congress. These transactions were cited as violations, disqualifying the party from tax exemption available to political parties.

In the absence of exemption, parties are treated as "association of persons" and are obligated to pay taxes on their reported income. Moreover, the cash transactions are included in their total income.

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