Dharmendra Pradhan tells Opec chief India has other oil buying options
New Delhi: Soon after India started importing crude oil from the US at $2 a barrel cheaper than Dubai crude, oil minister Dharmendra Pradhan told the 14-member cartel of producing nations, the Organization of the Petroleum Exporting Countries (Opec), that New Delhi has other buying options.
Pradhan who met Opec secretary general Sanusi Mohammad Barkindo in the capital on Sunday said “responsible pricing” by the producers’ grouping was important for India’s socioeconomic and development, a statement from the oil ministry said. Opec accounts for 86% of crude oil, 75% of gas and 95% of liquefied petroleum gas (LPG) that India imports.
The statement said quoting the minister that India is putting a lot of emphasis on diversifying its crude oil supply sources and tapping new supply sources. The Indian side also highlighted the recent arrival of crude oil cargo of 1.6 million barrels from US.
“Three Indian public sector refineries have already placed a cumulative order 7.85 million barrel from the US. In addition, a private sector refiner has also placed an order of two million barrels from the US,” said the statement quoting Pradhan.
Mint had reported on 29 September that Indian Oil Corp. Ltd was set to receive its first crude oil shipment from the US on 2 October, after Washington re-entered the export market last year.
The private refiner referred to here is Reliance Industries Ltd., said an industry executive, who asked not to be named. An email sent to RIL remained unanswered at the time of publishing.
Rising oil price in world market had forced the Indian government to cut excise duty on petrol and diesel by Rs2 a litre with effect from last Wednesday to tame rising inflation and to shield consumers from the surging price of auto fuels. According to finance ministry, the tax cut will deprive the exchequer about Rs 13,000 crore for the remaining part of the current financial year.
Opec’s Barkindo is in India to attend a conference. Pradhan also said that in today’s oversupplied market, it was important for producers to understand the perspective of consuming countries and the changes that have taken place in these demand centres. India has a refining capacity of 235 million tonne of crude.