The Paris-based International Energy Agency has revised up global oil demand forecasts for 2021 and 2022. According to IEA, global oil demand is set to rise by 5.5 million barrels per day (mb/d) in 2021 and 3.3 mb/d in 2022. Global oil demand is expected to reach 96.3 mb/d in 2021 and 99.6 mb/d in 2022.For the current month of November, the Organisation of the Petroleum Exporting Countries Plus (OPEC+) is said to be ready to boost output by 400,000 barrels per day. The IEA has warned that higher energy prices could lead to lower industrial activity and slowdown in economic recovery. Last month, petrol and diesel prices across India soared to all-time high levels as rates were hiked again and again ostensibly to keep pace with international oil price spurt. In October, the petrol price in Balaghat, which shares borders with Chhattisgarh and Maharashtra, reached Rs. 120 per litre.In reality, these price hikes were as much linked with high domestic levies as high international prices. While consumers in India suffered, the government pocketed windfall tax gains. Nearly two-third of the price of petrol paid by Indian consumers goes to the Central and state governments as levies.Incidentally, current world oil prices are still far below their alarming levels in the past. Historically, crude oil price reached an all time high of $147.27 in July 2008. At that time, the price was boosted by global supply worries, growing tensions over Iran and the weak US currency.And back then, the price of petrol in India was only Rs. 50.62 per litre and diesel Rs.34.86 per litre.Thus, the government’s routine explanation that the current high retail oil prices in India are entirely linked with the global prices is not quite acceptable.
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