With global oil prices hitting $105 a barrel on Thursday, September 10, former ONGC Managing Director and Chairman RS Sharma has urged policymakers to make consumers aware that prices of some domestic fuel-linked products may have to be raised, as the government and oil marketing companies (OMCs) cannot continue to absorb the losses.
Calling the current geopolitical circumsrances “unprecedented”, Sharma told NDTV Profit, “They should educate the consumers that the government and OMCs cannot contribute to absorb the losses, some of their product prices need to be raised.”
While urging to be mindful of fuel consumption, he further said that in the present situation, the government assures that there will be no shortage and steps in to absorb the impact and consumers do not feel the pinch, therefore there has been no demand discipline in terms of consumption.
“Consumers don’t feel the pinch and there no demand discipline so far as the consumption is concerned,” Sharma added.
The ex-ONGC head, however assured the current geopolitical scenario is “not a crisis situation.”
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Global crude oil prices crossed $105 per barrel on Thursday after Saudi Arabia flagged a sharp slump in oil production. This comes amid escalating tensions in the Middle East and disruptions to shipping through Strait of Hormuz raised concerns over global oil supplies and added to inflationary pressures. Brent rose 3.7% to $105 per barrel on Thursday.
This sharp rally comes amid an escalation in the US-Iran conflict and disruptions to shipping, raising concerns about the impact of higher energy prices on inflation, economic growth and India’s import bill.
Brent crude futures for November delivery jumped to a high of $101.94 per barrel earlier on Thursday, as disruptions at key shipping chokepoints threatened global crude flows. Brent has surged more than 13% so far this month and has risen nearly 70% year-to-date, putting it on track for its biggest year-to-date gain since 2009. The benchmark has also advanced for a fifth consecutive session.
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