Context: In a recently held G20 Extraordinary Energy Ministers’ virtual Meeting, India was represented by the Minister of Petroleum and Natural Gas.
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- The meeting was called by Saudi Arabia, in its capacity as the G20 President, and chaired by Saudi Arabia Energy Minister.
- The meeting was attended by Energy Ministers of G20 countries, guest countries and heads of international organizations including OPEC, International Energy Agency(IEA) and International Energy Forum(IEF).
Agenda of the meeting
- Setting demand supply equilibrium: The G20 Energy Ministers focused on ways and means to ensure stable energy markets, which are affected due to demand reduction as result of the COVID-19 pandemic and the ongoing surplus production - related matters.
- India calls for G20 taking a human-centric approach for overcoming challenging hardships, especially for the vulnerable.
- India assured that it was and will continue to be, the global energy demand centre.
- The Minister highlighted the decision of the government of India, under the aegis of the Ujjwala scheme, to provide 80.3 million poor families free LPG cylinders. This is as part of a 23 billion dollars relief package.
- The Minister highlighted the Government of India’s efforts to fill in Strategic Petroleum Reserves.
- In terms of the ongoing energy market fluctuations, India has always advocated for a stable oil market, which is reasonable for producers and affordable for consumers.
- India appreciated the collective efforts of OPEC and OPEC-plus countries to balance the supply-side factors which is imperative for long-term sustainability.
- India, however, urged that oil prices should be targeted to affordable levels to allow for a consumption-led demand recovery.
The G20 Energy Ministers’ meeting will be adopting a Joint Statement, in order to establish a Task Force to advise a framework of agreement for remaining engaged in the coming days.
The Indian Strategic Petroleum Reserve (ISPR)
- Refers to the emergency fuel storage maintained by Indian Strategic Petroleum Reserves Limited.
- Indian Strategic Petroleum Reserves Limited is a Special Purpose Vehicle, wholly owned subsidiary of Oil Industry Development Board under the Ministry of Petroleum & Natural Gas.
- These storages are at Mangalore (Karnataka), Visakhapatnam (Andhra Pradesh) and Padur (Karnataka) as per Phase I, with a fuel storage of total 5. 33 MMT (Million Metric Tonnes).
- Phase II: The government of India is planning to set up two more such caverns at Chandikhol (Odisha) and Udupi (Karnataka) through Public-Private Partnership, with an additional 6.5 million tons of the oil reserves.
Image Source: NY Times
- Formally the Summit on Financial Markets and the World Economy the G20 meeting is an annual gathering of finance ministers and heads of state representing the members.
- Initially attendance at G20 summits was limited to the finance ministers and central bank governors of members when it was established 17 years ago.
- Much of the important business takes place on the sidelines and in informal meetings.
- After the Asian Financial Crisis in 1997-1998, it was acknowledged that the participation of major emerging market countries is needed in discussions on the international financial system, and G7 finance ministers agreed to establish the G20 Finance Ministers and Central Bank Governors meeting in 1999.
- The first G20 summit occurred in Berlin, in December 1999, and was hosted by the German and Canadian finance ministers.
About Membership and Leadership of the Group of 20 (G-20)
- Members: The G20 is made up of the EU and 19 countries.
- Along with the members of the G-7, 12 other nations currently comprise the G-20: Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa, South Korea, and Turkey.
- Special invitees: In addition Spain is invited permanently as is the current chair of the Association of Southeast Asian Nations (ASEAN); two African countries (the chair of the African Union and a representative of the New Partnership for Africa's Development) and at least one country invited by the presidency, usually from its own region.
- International organizations such as the IMF, the World Bank, the United Nations, the Financial Stability Board and the World Trade Organization also attend the summits.
- Chairmanship: The chairmanship of the G-20 leaders' summit rotates among four groups of countries.
- The host country of the G20 summit leads the group over the course of one year from December through the following November as the G20 presidency.
- Sherpas, who are representatives of leaders of G20 member countries, coordinate on the agenda of a summit. Former Union Minister Suresh Prabhu was India's Sherpa at the Osaka G20 summit.
- There are two tracks in G-20 - Finance Track and Development Track.
- Finance Track is managed by the secretary (economic affairs) as India’s Deputy to G-20 and
- The Development Track is coordinated by the Sherpa.
International Energy Agency
- It came into being in the backdrop of the 1973 (set up in 1974) oil crisis which led to steep increase in oil prices by the OPEC cartel.
- It is headquartered in Paris, France.
- It is an organisation of autonomous nature, that works to facilitate reliable, affordable and clean energy to its 30 member countries, 8 association countries in its ambit and beyond.
Areas of Focus
The IEA has four main areas of focus,namely
- Energy security,
- Economic development,
- Environmental awareness
- Engagement worldwide.
More on IEA
- India became an associate member of International Energy Agency in 2017.
- Mexico officially became the 30th member country of IEA in 2018, and its first member in Latin America.
International Energy Forum(IEF)
- The International Energy Forum (IEF) is an inter-governmental, non-profit international organisation which aims to foster greater mutual understanding and awareness of common energy interests among its members.
- It has 72 member countries and they account for almost 90 percent of the global supply and demand for oil and gas.
- The forum is the world’s largest recurring gathering of Energy Ministers.
- Its participants not only include IEA and OPEC countries, but also key international players such as Brazil, China, India, Mexico, Russia, and South Africa.
- The 16th International Energy Forum Ministerial Meeting, 2018, was hosted by India and co-hosted by China and Korea.
It is a permanent, intergovernmental organization, headquartered in Vienna, Austria.
- Founder Members: The Organization of the Petroleum Exporting Countries (OPEC) was founded in Baghdad, Iraq, with the signing of an agreement in September 1960 by five countries namely Islamic Republic of Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. They were to become the Founder Members of the Organization.
- Currently, the Organization has a total of 14 Member Countries.
- OPEC’s objective is
- to coordinate and unify petroleum policies among Member Countries, in order to secure fair and stable prices for petroleum producers;
- an efficient, economic and regular supply of petroleum to consuming nations; and
- a fair return on capital to those investing in the industry.
- OPEC membership is open to any country that is a substantial exporter of oil and which shares the ideals of the organization.
- OPEC+ refers to the alliance of crude producers, who have been undertaking corrections in supply in the oil markets since 2017.
- OPEC plus countries include Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan and Sudan.
- The Opec and non-Opec producers first formed the alliance at a historic meeting in Algiers in 2016.
- The aim was to undertake production restrictions to help revive a swinging market.