India committed to buy economically-priced energy: Oil minister Hardeep Singh Puri

The global oil market is expected to witness a supply glut as non-OPEC countries such as the US plan to ramp up production amid declining demand.

India is committed to buying economically-priced crude oil with government’s priority fixated on making energy available to consumers “at all times”, said minister of petroleum and natural gas Hardeep Singh Puri on January 24.

On being asked about India’s stance on crude oil term-deals with producing countries, Puri said, “We are not committed to buying any quantity from anyone; we are committed to buying the most economically-priced energy of the grade of crude that you (refineries) want.”

Indian refiners including Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) have been in talks with Russia for finalising crude oil term-deals. The companies, however, have been unable to conclude a deal with Moscow.

With the US tightening sanctions on Russia, the talks for oil term-deals with Moscow are reportedly put on hold, according to some media reports, with India’s oil imports from the country likely to slump in the coming months. To replace the Russian oil, Indian refiners are securing more oil from its traditional suppliers including Saudi Arabia and Iraq.

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Puri told reporters that the Modi government’s commitment is to “make energy available at all times in the most affordable manner along with transition to green energy.”

“Energy is available in abundance supply. More and more crude is coming to the market in spite of the cutbacks that came from some of the producers,” he added.

The global oil market is expected to witness a supply glut as non-OPEC countries such as the US plan to ramp up production amid declining demand.

India’s petrochemical projects

Giving an update on Ratnagiri refinery, a planned plant of 60 MMTPA (million metric tonnes per annum) capacity, Puri said the project was unviable on account of its large capacity. The companies would instead build three smaller refineries of capacity around 20-25 MMTPA, he added.

Indian refineries were earlier planning to set up a 60 MMTPA refinery in Ratnagiri in Maharashtra, but were unable to execute the project due to issues such as land acquisition.

“So I think the position as of now is that instead of one 60 million metric tons per annum, you're looking at possibility of three 20 million metric tons per annum (refineries), and for which discussions are going on,” said Puri.

Meanwhile, BPCL is planning to set up a 9 MMTPA refinery in Andhra Pradesh and is currently working on DFR (detailed feasibility report) for the project. Other OMCs such as IOCL and HPCL are also expanding their refining capacities.

Amid rising energy demand, India aims to increase its refining capacity to 450 MMTPA by 2030 from around 250 MMTPA currently.

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