High oil prices holding up global economic growth: Reddy

India's annual average cost of imported crude oil increased by $27 per barrel over the last two financial years (2010-11 and 2011-12) jacking up India's oil import bill to $140 billion from $100 billion, petroleum minister Jaipal Reddy said today.

Speaking at the 5th OPEC International Seminar in Vienna, Reddy said, ''It is estimated that a sustained $10 increase in oil prices lead to a 1.5 per cent reduction in the GDP of developing countries.''

''We have seen evidence of this in our own country: India's GDP grew at 6.9 per cent during the last financial year, down from the 8 per cent plus growth rate experienced in the past few years,'' the minister said.

Further, since the full impact of the high international oil prices could not be passed on to the consumer, the government had to shell out subsidies amounting to $25 billion, he said.

He said market perceptions about oil prices might differ. While some believe that the market takes the price push in its stride and economies absorb the shocks, there is enough evidence to show that the volatile oil prices continue to dampen economic growth across the world – both in the advanced and developing countries,

High oil prices continue to weaken global efforts for an expeditious recovery from the ongoing global economic recession and the weak conditions in the economies of the US and Europe as well, he said.