Why shouldn’t Indian refiners negotiate good discount on long-term oil deal with Russia: Puri

Stressing that India holds the ‘market’ card due to its large oil appetite, Puri endorsed the idea of Indian refiners jointly negotiating a long-term oil deal with Russia

Russia has been offering most of its oil in the spot market, with prices hovering around USD 70/barrel in May.

IOC and Rosneft were unable to renew their long-term oil supply deal due to disagreements on price and volumes, compelling IOC to turn to the spot markets.

BPCL has publicly announced plans to reduce its crude oil imports from Russia in the current fiscal year as the discounts offered by Russia have moderated.

New Delhi: Stressing that India holds the ‘market’ card due to its substantial oil appetite, Minister for Petroleum and Natural Gas Hardeep Singh Puri endorsed the idea of Indian refiners jointly negotiating a long-term oil deal with Russia. During a press interaction on Wednesday, Puri commented on speculative reports regarding this strategy, saying, “Why should the Indian refiner not want to negotiate a good discount on a long-term basis? Why is that a surprise? You are holding one of the most important cards in your hand, which is the market card, which means that 5 million plus barrels a day are consumed in India.” He added that while he is not aware if such negotiations are currently underway, he fully supports the idea.

Media reports indicate that the government has informally asked refiners, both private and public, to lock in at least a third of their contracted supply from Russia at a fixed discounted price to protect the economy from crude oil market volatility.

India, one of the largest consumers of crude oil globally, consumes nearly 5 million barrels per day (mb/d). According to official data, in FY2023-24, Indian refiners processed 5.24 mb/d, compared to 5.13 mb/d in FY2022-23 and 4.85 mb/d in FY2021-22.