Dharmendra Pradhan raises issue of premium on oil supplied to Asian countries by OPEC

Pic Courtesy: @dpradhanbjp

New Delhi: Petroleum Minister Dharmendra Pradhan on Sunday again raised the issue of premium being charged on oil supplied to Asian countries by some OPEC members and asked that a reasonable pricing policy be adopted by the 13-nation producers' cartel.

According to a Petroleum Ministry release here, the issue came up in the talks between Pradhan and the Organisation of the Petroleum Exporting Countries (OPEC) Secretary General Sanusi Mohammad Barkindo, who is in India to attend the first CERAWEEK India Energy Forum. 

"Pradhan reiterated that OPEC should work towards responsible pricing, which is important for India for socio-economic and developmental reasons," the statement said.

"He emphasized India's earlier view of 'Asian Dividend', rather than charging 'Asian Premium', on the crude supplied and said that countries like India should actually be the preferred destination," it said. 

Pradhan highlighted that in the currently oversupplied crude market, it is important for producers to understand the perspective of consuming countries and the changes that have taken place in these demand centres, and suggested that the OPEC at its ministerial meetings give wider consideration to Indias requests.

Noting that India is putting a lot of emphasis on diversifying its crude oil supply sources, he pointed to the recent arrival of two shipments of crude oil cargo of 1.6 million barrels from the US. 

"Three Indian public sector refineries have already placed a cumulative order of 7.85 million barrel from the US. 

"In addition, a private refiner has placed an order of 2 million barrels from the western nation," the statement said. 

The minister, who was accompanied by senior officials, also extended an invitation to the Secretary General to attend the 16th ministerial meeting of International Energy Forum scheduled to take place in India in April 2018.

Pradhan had earlier raised the issue of premium being charged on oil supplied to Asian countries by some OPEC members when the two last met in Vienna in May this year for the 2nd India-OPEC Institutional Dialogue.

The demand for crude oil in India is expected to grow by over 3 per cent in 2017 at around 4.5 million barrels per day.

Last November, major oil producers agreed to cut output as a response to the global supply glut that had been pushing down prices for nearly two years.

In May, Saudi Arabia and Russia agreed on the need to prolong the current agreement on cuts until March 2018.