We only control supply: Saudi Arabia to PM Modi's warning to oil producers

New Delhi: Prime Minister Narendra Modi on Monday warned oil producers like Saudi Arabia that high crude prices were hurting the global economy as he sought reasonable rates and a review of payment terms to provide a temporary relief to the local currency.

At the third annual brainstorming session with the chief executives of top global and Indian oil and gas companies, PM Modi also appealed to top oil producers to help nations like India bridge what he called a "resource crunch" - a fallout of rising crude prices.

The rising crude oil prices have pushed the rupee down - this year it has fallen 14.5 per cent, making imports costlier. The country is over 83 per cent dependent on imports to meet its oil needs.

"The oil market is producer driven and both the quantity and prices are determined by the oil-producing countries... Though there is enough production, the unique features of marketing in the oil sector have pushed up the oil prices," a statement issued at the end of the meet quoted the Prime Minister as saying.

Saudi oil minister Khalid A Al-Falih, who was present at the meet, however, said oil prices were not within their control.

"Many factors lie outside the control of oil producers like us... we only control supply," Falih told reporters on the sidelines of the event.

He, however, said he has met the Prime Minister and oil minister Dharmendra Pradhan and "assured them of full and continued commitment of meeting India's oil demand as well as continuing to invest here in India".

Saudi Arabia is the India's second-biggest oil supplier behind Iraq and is committed to meet any shortfall that may arise due to sanctions on Iran, Falih said.

The meet was held as petrol and diesel prices continued their upward march despite a drop in crude oil prices by 5 to 6 dollars a barrel. The hike has almost wiped out the Rs 2.50 cut made by the government last week.