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HomeBusinessGovt say no plan to pay in rupee for Russian oil

Govt say no plan to pay in rupee for Russian oil

NEW DELHI: There is no plan on the table to pay in Rupee for crude oil state-run refiners are buying from Russia or any other country, the government informed Parliament on Monday.
“At present, oil public sector undertakings neither have any contract nor is any such proposal under consideration from Russia or any other country for the purchase of crude oil in Indian rupees,” junior oil minister Rameshwar Teli informed the Rajya Sabha in a written reply.
Oil minister Hardeep Puri had on March 15 told Parliament the government was having conversation “at appropriate level of the Russian Federation” on buying Russian oil. “Discussions are currently underway. There are several issues to be gone into like how much oil is available,” he said.
On March 18, MEA spokesperson Arindam Bagchi echoed this saying, India, as an import-dependent country, will continue to explore all possible sources for oil and indicated Russia was one such source.
India meets 85% of its oil demand through imports. The share of Russian oil in the total imports is insignificant at about 1%. But state-run refiners recently began buying Russian oil available in the market at discounts to reduce their input costs.
The crippling sanctions have forced many countries to shun Russian oil due to shipping, insurance and payment issues, leaving traders saddled with shiploads. They are now offering, as some western reports have suggested, up to $25 per barrel discount against benchmark Brent crude, up from $2-3 before the conflict started, to attract buyers.
State refiners are buying these shipments from the spot market through tenders on the condition traders take care of delivery.
Since Russian energy supplies, per se, are not under sanctions and the trading houses not Russian, the Indian companies are using the international banking channels to make payments.
IndianOil in 2020 signed a deal with Rosneft for 2 million tonnes of oil, becoming the first Indian refiner to enter into an annual contract for Russian oil. But Rosneft’s refusal to offer some discount to offset the prohibitive shipping cost from the Black Sea port of Novorossiysk proved to be a sticky point.
Though IndianOil renewed the contract the following years, it imported only 1-2 cargos.




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