InvestorQ : Do you see the state-owned OMCs like IOC, BPCL and HPCL cutting imports from Saudi Arabia in line with the recent government order?
Debbie Mascarenhas made post

Do you see the state-owned OMCs like IOC, BPCL and HPCL cutting imports from Saudi Arabia in line with the recent government order?

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Arti Chavan answered.
3 weeks ago
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Despite the recent government order, the oil PSUs may find it tough to cut crude imports from Saudi Arabia as it could have implications for costs and supplies. Most of the oil PSUs have admitted that they would find it tough to find a reliable alternate crude oil supplier. Additional freight charges could add to the cost of oil from other countries. In the past, other countries had apparently promised huge supplies but failed to deliver.

Dharmendra Pradhan has been pushing for diversification of crude resources and reducing dependence on West Asia. Indian government has been unhappy that the OPEC has turned a deaf ear to India’s repeated requests for expanding supply to cut prices. Recently, HPCL-Mittal bought oil cargo from Guyana, but these are still small. The problem is that OPEC accounts for 83% of India’s oil imports.

OMCs admit that despite repeated instructions to diversify, they go back to OPEC due to considerations of cost, supply, volume and freight. Other major suppliers like Russia and the US have their own challenges and priorities. Most OMCs have pointed that the real reason is the sharp spike in excise duties on petrol and diesel which are 247% in the last 4 years, which has been responsible for this landed oil price problem.
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