New Delhi: HPCL will ask Saudi Arabia for extra crude in August, a source at the state-run refiner told Reuters on Tuesday, following others in the energy-hungry Asian giant who have grasped the Opec member’s offer to boost supply.
Three Indian refiners asked for an extra 2.6 Million-2.7 million barrels for July from Saudi Arabia, which decided to offer the extra oil unilaterally after Opec last month failed to agree any new output deal.
“During the rainy season our consumption of Arab Extra Light goes up at the Mumbai refinery because it gives a higher volume of fuel oil. The demand for asphalt declines during the rainy season,” the source said on condition of anonymity.
HPCL’s annual contract with Saudi Arabia is for 1.75 million tonnes or 35,000 barrels per day (bpd) of crude. The source did not give details of the extra request.
On Tuesday, Saudi Arabia’s state oil company Saudi Aramco cut prices of its crude to Asian clients for August.
“If they have cut the prices, we would like to have more,” the source said.
Concerns over high energy costs that could damage the fragile global economy prompted major consuming countries to agree to release oil from emergency stockpiles last month.
India’s trillion dollar economy is growing at around 8% but its inflation rate is nudging 9% and fuel costs were up nearly 13% even before the government raised diesel prices at the end of June.
India relies heavily on imports for its oil needs and Saudi Arabia is its largest supplier.
Its second-biggest supplier, Iran, has not received payment for crude for months, as the two sides try to work out a method of getting funds to the sanctions-hit country which will be politically acceptable to India’s global allies.
Indian refiners IOC , MRPL and privately-owned Essar together have asked Saudi Arabia for an extra 2.6 million-2.7 million barrels of crude in July.
HPCL’s Mumbai refinery has capacity of some 130,000 bpd and it also has a 166,000 bpd plant at Vizag.