India and Russia are working to increase the supplies of Russian crude oil to Indian refiners in the light of a supply disruption in Saudi Arabia.
The issue was discussed during a meeting between Minister for Petroleum and Natural Gas, Dharmendra Pradhan, and the Chairman of the Management Board and CEO, Rosneft and Former Deputy Prime Minister of the Russian Federation, Igor Sechin, here on Tuesday.
“The developments in the energy markets, including global crude oil supplies, in the light of the recent attacks on Saudi Aramco’s facilities, was also discussed. In this context, a special focus was on increase of crude oil supplies from Russia to Indian refineries,” an official statement said.
A discussion was held between Indian oil marketing companies and Rosneft on finalising a term-contract for supply of Russian crude oil to India.
The two Ministers also reviewed the ongoing joint projects in Russia between Indian oil and gas PSUs and Rosneft, specifically Sakhalin-1, Taas-Yuryakh and Vankor fields.
An Indian consortium of four oil and gas public sector undertakings (BPRL, IOCL,OVL and OIL) and Rosneft also exchanged a non-binding cooperation agreement, reiterating their interest in participation of the Indian companies in the Eastern Cluster project of Russia.
Another area of discussion was the plan of the consortium of foreign investors, including Rosneft, for further development of Nayara Energy. The consortium is reviewing an option of a two-fold increase in the refining throughput at the Vadinar Refinery. In the first stage, the consortium commits to investment $850 million towards the building of a petrochemical unit in Vadinar within two years. The consortium also plans to expand Nayara Energy’s retail presence from the over 5,300 retail outlets across the country, the statement added.
Volatility concern
Meanwhile, India has expressed concern over the volatility in crude oil prices..
“Certainly, when there is a spike in the price, it creates anxiety in the Indian market,” Pradhan said on the sidelines of an event to mark the award of contract for setting up a coal gasification unit for production of urea ammonia by Talcher Fertiliser Ltd.
“We have lifted more than half the contracted quantity due for September from Saudi Arabia till now. We are still procuring crude and lifted quantities both yesterday and today. India is keeping a close watch on the situation in Saudi Arabia. We have held talks with Saudi Arabia on a diplomatic level,” Pradhan said.
On Tuesday, domestic oil marketing companies hiked prices of petrol and diesel across the country. Petrol was sold at ₹72.17 a litre, 14 paise higher than the price on Monday. Diesel was sold at ₹65.58 a litre, 15 paise more than the price on Monday. The immediate impact is estimated to hike the price of both auto fuels by ₹1 a litre each, with the possibility of price going up by ₹5 a litre.
Consumers are worried about the supply disruption and the prices going up. “More worrying is the fear of disruption in oil and gas supplies to India if the situation worsens in the Middle East War Zone and then LPG and short supply of diesel may lead to major speed breaker in transportation business. The government needs to explain the emerging situation in clear terms so that business sentiments are not further shattered,” SP Singh, Senior Fellow and Coordinator at Indian Foundation of Transport Research and Training, said.