India is forming a group of state-run and private refiners aimed at seeking better crude import deals, Reuters reported.
India, the world’s third largest oil importer and consumer, depends on imports for about 85 percent of its crude and buys most of it from Middle East producers.
Initially the group of refiners will meet once in a fortnight and exchange ideas on crude purchases.
The companies can form joint strategies and they can even go for joint negotiations wherever possible, India’s oil secretary Tarun Kapoor said.
Indian state refiners already jointly negotiate some crude oil purchases.
Refiners have achieved a deal that secured supply of Iranian oil at a deep discount thanks to joint negotiation.
With local gasoline and gasoil prices rising to a record high amid India’s worst power crisis in years, the nation wants to redouble its efforts to buy wisely.
India’s trade deficit in September surged to a record $22.6 billion, its highest in at least 14 years, driven by expensive imports.
The Organization of the Petroleum Exporting Countries and its allies (OPEC+) should raise production to bring down global oil prices, Kapoor said.
“OPEC+ should realise that this is not the right approach, they must step up production. If the demand is going up and you are not increasing production, you are trying to create a gap,” Kapoor said. “Due to this, prices are going up and that’s not fair.”
OPEC+ producers recently agreed to stick to a plan to increase November output by 400,000 barrels per day (bpd) as it looks to phase out output curbs of 5.8 million bpd over time.
India is already reducing the share of OPEC oil in its crude mix as refiners, that have invested billions of dollars in refinery upgrades, are tapping cheaper oil.