While the surprise supply cuts announced by Saudi Arabia earlier this month were welcomed by oil producers, India, which relies on OPEC to serve roughly 83 per cent of its energy needs, wasn’t all that pleased. In early December last year, Union Minister Dharmendra Pradhan expressed hope that fuel prices would stabilise on the back of OPEC opting to increase crude oil production as it sought a recovery from a tumultuous year.
Since December, Moscow had been pushing the petroleum bloc to increase supply by an additional 500,000 barrels a day for February and there was enough evidence to suggest that it may have got its way.
Yet, on January 6, in a show of primacy, Saudi Arabia decided to unilaterally slash output by 1 million barrels a day in February and March, despite most other nations within the grouping choosing to maintain supply levels. “We are the guardian of this industry,” said Saudi Energy Minister Prince Abdulaziz bin Salman who added that the decision was taken by Crown Prince Mohammad bin Salman himself.
Saudi Arabia’s, and effectively OPEC’s decision is likely to have significant implications for the average Indian commuter. Following a month-long break, fuel retailers have slowly begun increasing the prices of fuel and diesel since January 6. Since then, the price of petrol in Delhi has risen by Rs 1.49 and diesel by Rs 1.51.