A steep Rs 5.62 per litre hike notwithstanding, diesel continues to be sold at a discount of Rs 11.05 per litre to its actual cost as international rates continue to rule high.

“In the present international environment of rising petroleum prices, greater alignment of prices to global prices is in the interest of both consumers as well as investors,” Mukherjee said inaugurating the 10th edition of Petrotech Oil & Gas Conference here.

“The government of India is committed to adopt a time-bound programme to achieve this,” he said.

The government had in June 2010 freed petrol price from its control and agreed to free diesel rates in a calibrated manner.

“Just like financial markets, the world energy markets are inherently global and interdependent, and no single country can isolate itself from the market,” the President said in an apparent reference to India's dependence on world markets to meet its energy needs.

India's oil import bill, he said, has crossed $150 billion as it imports 75 per cent of its needs.

“For a GDP growth of over 8 per cent during India's 12th (Five Year) Plan, it would be imperative for us to ensure better demand management in our country,” he said. “There must be increased understanding of the fact that the path to a more sustainable future will require our society to make a better balance between its energy consumption vis a vis its cost and availability.”

He stressed on building strong economic partnerships with other producing countries and their oil and gas industries to the mutual benefit.

Stating that the emergence of major consumers in India and China has fundamentally changed the global energy equations, Mukherjee said, “The global nature of these challenges and the growing symbiotic connect between producing, consuming and transiting countries, requires a strengthened partnership between all state actors to enhance global energy security.

“There is, on one hand, a growing demand for energy and at the same time a set of challenging resource constraints which call for a reshape of the matrix of our energy policy,” he said.

Mukherjee said over $14 billion has been invested in oil and gas hunt under the New Exploration Licensing Policy since 1999 which has yielded 87 oil and gas discoveries.

“NELP has all the ingredients of a favourable investment climate, fiscal stability, transparency of the rule of law, contract stability, minimal policy induced uncertainties and a stable legal and regulatory framework,” he said.

Also, India has emerged as a major export hub with 215 million tonnes of refining capacity surpassing demand, he said adding exports of petroleum products have now crossed 60 million tonnes, fetching revenue of close to $60 billion.

“It has emerged as the single largest component of merchandise exports from India.”

The President said government's top priority is to realise the full potential of coal bed methane, shale gas, underground coal gas, gas hydrates, and biofuels.