New Delhi, July 3 (IANS) Blaming India and China for the oil price hike is “completely devoid of merit”, Indian petroleum minister Murli Deora told the World Petroleum Congress in Madrid Thursday. Oil prices again broke another record Thursday with Brent crude, sourced from the North Sea, rising over $146 a barrel in London.

Oil prices are now more than five times their level seven years ago.

“A small section of the oil analysts has been ascribing the relentless rise in crude prices in recent months to the spurt in demand for oil from India and China. I wish to take this opportunity to set the record straight,” Deora said.

The minister said while the two Asian giants accounted for one-third of the world’s population, their combined oil consumption is less than one-eighth of global consumption.

“And, with steadily declining energy intensity, both our countries are registering rapid economic growth with less than proportionate increase in oil demand,” Deora said, adding that the high rate of growth in the two countries was a “significant factor in ensuring stable and orderly growth of world economy”.

Further, he noted, India’s surplus refining capacity has a “sobering effect” on prices of refined oil products as it reduced the imbalance between demand and supply.

“Given these facts, we are of the firm view that attribution of high crude prices to rising demand from India and China is completely devoid of merit and misses the wood for the trees,” he said.

Deora also justified India’s subsidy on motor and cooking fuels, saying the current volatility of the market made it imperative for states to have a buffer.

“While we agree that fuel subsidies may have a negative impact on the energy market in the long run, the current volatility in international oil prices and its potential for destabilizing emerging economies makes state intervention in pricing of life-line fuels inevitable,” he said.

At the same time, he said, subsidising prices of “life-line fuels” was important to protect the weaker sections of society.

Last month, the government had increased fuel prices of petrol and diesel by Rs.5 and Rs.3 a litre, respectively. This had had been greeted by protests from opposition parties.

Truckers in India are also on an indefinite strike to protest against this hike.

Deora said the government had a five-pronged strategy to enhance energy security and maintain an economic growth of 9 to 10 percent.

These five steps are increasing domestic exploration and production activities, acquiring oil and gas assets abroad, developing alternate sources of oil and gas, oil conservation and implementation of environment-friendly policies, and establishing a strategic storage of crude oil.