India’s HPCL chair says ‘high’ crude prices could weigh on fuel demand, Auto News, ET Auto

Mr. Mukesh Kumar Surana, Chairman & Managing Director, HPCL
Mr. Mukesh Kumar Surana, Chairman & Managing Director, HPCL

NEW DELHI: The chairman of India’s Hindustan Petroleum Corp Ltd, Mukesh Surana, said the current ‘high’ crude oil prices could lead to demand destruction in the long run.

Surana said $60-$70 per barrel was a comfortable range for refiners in India, the world’s third biggest oil consumer which imports about 85% of its oil needs.

Oil futures have been trading near multi-year highs due to a global energy supply crunch, with the Brent crude benchmark at $84.30 a barrel on Wednesday.

Surana said Indian refiners were working to trim import costs, with jointly negotiated contracts, allowing for better terms, one of the strategies under discussion.

India is looking to bring together state-run and private refiners to seek better crude import deals, oil secretary Tarun Kapoor told Reuters on Tuesday.

HPCL has restarted the fire-hit crude unit at its Visakhapatnam refinery, Sunara said, adding the group’s three refineries were running at an average 100% capacity.

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The rising fuel prices in the country are not going to come down immediately. The central government is in talks with several oil-exporting countries on the issue of supply and demand of oils but there is no possibility of immediate relief in prices.

International oil prices had crashed to $19 per barrel in April last year as demand evaporated with most nations clamping lockdowns to control the spread of coronavirus. The demand recovered this year as vaccination against the infection revived economies world over.