Indian Refiners To Collectively Negotiate With Saudi Arabia Over ‘Unfavourable’ Oil Purchase TermsAn oil refinery in India (PTI)

Public sector refiners in India might pursue a smaller purchase deal of oil from Saudi Arabia in the coming year to compel the latter to modify certain contractual terms that they deem as ‘unfavourable’.

One of the persons in the know told Economic Times that there should be further flexibility in the contracts given that it promotes monopoly of the seller in the current circumstances.

To give an example, the individual said, “We can’t take more when the prices are low, nor can we order less when prices rise because orders are placed so much in advance and there are certain broader monthly commitments.”

He claimed that the refiners desire flexibility in terms of prices and a guarantee of supply even during times when production levels fall due to some reasons.

As of now, Saudi is allowed to reduce supplies given that the Organization of Petroleum Exporting Countries (OPEC) decides to artificially increase the prices by cutting down the production.

On the other hand, the buyers are bound to the extent that they have to place their loading plans for May by 5 April itself. State refiners are now looking to share industry intelligence with their private counterparts and collectively negotiate their purchase terms with the suppliers.

An Appeal...

Dear Reader,

As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.

Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.

We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.

Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.

Become A Patron
Become A Subscriber
Advertisement