Crude oil imports: India needs to create an alternative framework

0
8

Crude oil imports: India needs to create an alternative framework
In proportion to India’s population and increasing oil demand, India does not have the amount of crude oil it needs, that is why India has to import crude oil in large quantities.

There is a lot of flurry among the G7 countries to determine the import price of Russian crude oil, but Russia is not far behind in responding to it. Officials said that Moscow has told New Delhi that it is ready to give oil to India at a lower price than before. The official of the Ministry of External Affairs said, ‘In principle it can be said that in return India should not support the G-7 proposal.

The issue will be decided later, as talks are on with all the stakeholders at present. Officials said the exemption would be higher than what Iraq had given during the past two months. The price of Russian crude oil for India in May was lower by $16 a barrel against the average price of $110 a barrel in the Indian crude import basket. The discount was reduced to $14 a barrel in June and the average price of the Indian crude basket at that time was $116 a barrel. As of August, the price of Russian crude oil was $6 lower than the average crude import basket price, officials said.

At present, India’s largest oil supplier, Iraq, overtook Russia by supplying oil at $ 9 per barrel lower than Russia at the end of June. After this, the Indian market, which is considered more sensitive to price, shifted towards Iraq.

As a result, Russia slipped to the third position in the list of India’s top oil supplier countries. Russia contributes 18.2 per cent to India’s total oil requirements. Saudi Arabia topped the list with 20.8 per cent contribution and Iraq came second with 20.6 per cent contribution.

Officials believe that even without a rise in prices, the supply of crude oil is expected to remain intact from outside West Asian countries. Another official said, “Although imports from Iraq will continue to play a major role in our oil purchases, India needs to create an alternative framework given the global complexities and the unstable situation in Iraq.”

India has been trying to create an alternative framework in terms of crude oil for a long time, but it is not getting as many successes as India expects.

LEAVE A REPLY

Please enter your comment!
Please enter your name here