The Union government is holding parleys with state-run energy firms and private refiners to synergise imports of crude worth over $100 billion annually so that they can collectively bargain better prices from global oil producers at a time when auto fuel rates have soared over ₹100 per litre in several Indian cities.
Although refiners are free to source crude oil from across the globe, the government is making efforts to have a common mechanism for collective bargaining that would reduce the average cost of crude imports and benefit all stakeholders, petroleum secretary Tarun Kapoor said.
“We have already held couple of meetings with petroleum companies, both in public and private sectors,” Kapoor said, adding that this was a work in progress. Currently, refiners have individual crude sourcing strategy.
The initiative is significant in the light of northward rise in petrol and diesel rates since May 4. India is world’s third largest crude oil importer after the US and China, and purchases more than 80% of the crude oil it processes.
It imported 227 million metric tonnes (MMT) of crude worth $101.4 billion in 2019-20, the year preceding the Covid-19 pandemic. Imports, however, fell to 198.1 MMT in 2020-21 because of the pandemic.