New Delhi: Mangalore Refinery and Hindustan Petroleum are likely to cut crude oil imports from Iran next fiscal as western sanctions against the Persian Gulf nation forces them to diversify their oil sourcing basket.
MRPL, which is India's largest buyer of Iranian crude oil at 142,000 barrels per day, is likely to trim down its imports from Tehran to just about 100,000 bpd next fiscal, industry sources said.
India has already made pleas with Saudi Arabia and Iraq to supply more crude next fiscal to help MRPL and other cut their Iranian purchases.
Oil Minister S Jaipal Reddy last month made a passionate plea for up to 5 million tons a year or 100,000 bpd of oil over and above the current purchase of 27.361 million tons from Saudi Arabia. Last week he sought 3-4 million tons additional oil from Iraq, which currently supplies 17.158 million tons a year.
Sources said Essar Oil, the nation's second largest buyer of Iranian oil, is renewing its contract to buy 100,000 bpd of oil and the same is the case with Indian Oil Corp (IOC) for its 30,000 bpd of purchases.
IOC would cut Iranian imports if Saudi Arabia were to increases exports.
HPCL plans to double crude oil imports from Saudi Arabia next fiscal and cut purchases from Iran by over 14 percent. HPCL in 2012-13 has proposed to buy 3.5 million tons of crude oil from Saudi Aramco of Saudi Arabia against 1.75 million tons of oil bought in current year.
It will cut down purchase from Iran to 3 million tons from 3.5 million tons in the current year.
Indian refiners fear problems in paying for crude oil they buy from Iran after the US and European Union imposed fresh sanctions to deter the Islamic regime for its nuclear programme.
Sources said Bharat Petroleum (BPCL) is not renewing its 20,000 bpd contract with Iran as it has not been able to open an account with a Turkish bank that currently routes payments made by Indian refiners to Iran.
MRPL, they said, may end up purchasing about 120,000 bpd of crude from Iran this fiscal as against 142,000 bpd contracted volumes.
Iran is India's second largest supplier of crude oil behind Saudi Arabia. It in 2010-11 supplied 18.499 million tons of oil or about 11.3 percent of the nation's total import of 163.594 million tons.
This fiscal, these imports are likely to fall by at least 10 percent. The decline would be more drastic next year, they said.
First Published: Monday, March 05, 2012, 09:31