The Union government is in talks with state energy companies and private refiners to synergize crude imports worth more than $ 100 billion a year so that they can collectively negotiate better prices from global oil producers at a time when auto fuel rates have skyrocketed. ₹100 per liter in several Indian cities.
Although refiners are free to source crude oil from around the world, the government is striving to have a common collective bargaining mechanism that would reduce the average cost of crude imports and benefit all stakeholders, a said Petroleum Secretary Tarun Kapoor.
“We have already held a few meetings with oil companies, both in the public and private sectors,” Kapoor said, adding that it was a work in progress. Currently, refiners have an individual crude supply strategy.
The move is significant in light of the northward hike in gasoline and diesel prices since May 4. India is the world’s third largest importer of crude oil after the United States and China, and purchases more than 80% of the crude oil it processes. It imported 227 million metric tons (MMT) of crude worth $ 101.4 billion in 2019-2020, the year before the Covid-19 pandemic. Imports, however, fell to 198.1 MMT in 2020-2021 due to the pandemic.
Kapoor said the cartel of oil producers artificially raised international oil prices by resorting to production cuts, which goes against the long-term interests of oil producers. Benchmark Brent crude, which fell to $ 19.33 per barrel on April 21, 2020, gradually rose to over $ 50 per barrel in early 2021, mainly due to the Organization’s supply squeeze. oil-exporting countries and its allies, including Russia (together known as OPEC +). With growing demand and supply constraints, oil prices hit $ 74.39 per barrel on Wednesday June 16, 2020, the highest since April 2019. On that day, WTI (West Texas Intermediate) broke. set at $ 72.15 per barrel, the highest since October 2018.
India denounced OPEC’s unfair trade practices. Speaking at an OPEC symposium this year, Oil Minister Dharmendra Pradhan said India supports decisions by oil producers to cut production to curb the free fall in oil prices in April from last year, but when demand normalizes, supply should be restored.