09:42 GMT +321 November 2019
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    A flag with the Organization of the Petroleum Exporting Countries (OPEC) logo is seen before a news conference at OPEC's headquarters in Vienna, Austria, December 10, 2016

    India, World's Third Largest Oil Consumer, Demands Better Credit Terms From OPEC

    © REUTERS / Heinz-Peter Bader/File Photo
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    New Delhi (Sputnik): The Indian government has asked the 14-member Organisation of Petroleum Exporting Countries (OPEC) to lower its credit pricing regime for Asian countries if it wants access to its vast market for oil imports in the near future.

    India's Petroleum and Natural Gas Minister Dharmendra Pradhan conveyed cautionary advice to OPEC Secretary-General Muhammad Sanusi Barkindo on Tuesday, the final day of the three-day India Energy Forum (IEF), Indian daily Times of India reported.

    Leveraging India's position as the world's third-largest consumer of oil and energy, the minister informed the OPEC chief that there is a need for the latter to lower the Official Selling Price (OSP) and enhance the credit period from 30 to 90 days for consumers in Asia.

    He also sought a discount on freight and demanded open credit, based on the creditworthiness of India's state-run refiners, the country's leading importers of crude.

    A cartel of 14 oil-exporting countries, OPEC accounts for 80 per cent of India's oil imports currently.

    One of the factors behind the official selling prices being higher for Asian customers is the premium in price markers generated from the spot markets of Dubai and Oman, said the Times of India in its report.

    While India claims that this so-called 'Asian Premium' exists and needs to be withdrawn, OPEC denies its existence and says pricing is solely determined by market forces and performance.

    The minister used his meeting with the OPEC chief to indirectly remind him of OPEC's reduced clout in the global oil market. He flagged the recent drone attack on Saudi Aramco's oil processing and production capacity, saying Indian companies are ready to widen the import basket to avoid supply disruption at all costs.

    The minister, however, also informed the OPEC chief of India's desire to convert the present buyer-seller equation with OPEC into a strategic partnership.

    He also praised OPEC member-countries for helping India meet its oil import shortfall, following US sanctions on crucial supplier Iran.

     

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    Tags:
    energy, oil market, import, Oil, Dharmendra Pradhan, minister, OPEC, India
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