India will continue to buy oil from Russia: FM Nirmala Sitharaman

Russia is offering more oil to India at a discount of as much as $35 a barrel on prices before the Ukraine war

India will continue buying cheap Russian oil in the nation’s interest, Finance Minister Nirmala Sitharaman said, even as pressure mounts to isolate Kremlin.

“We have started buying, we have received quite a number of barrels -- I would think three-four days supply and this will continue,” Sitharaman said at a CNBC-TV18 event on Friday. “India’s overall interest is what is kept in mind.”

Indian state refiners have been doubling down on Russian barrels that are being shunned away by European buyers since the beginning of war in Ukraine. The country has contracted Russian crude oil for deliveries over the next three to four months, Oil Minister Hardeep Singh Puri said last week.

Russia is offering more oil to India at a discount of as much as $35 a barrel on prices before the war, Bloomberg News reported Thursday.

“I would put my energy security first. If the fuel is available at a discount, why shouldn’t I buy it?” Sitharaman asked.

The comments come in the backdrop of Russian Foreign Minister Sergei Lavrov’s visit to the country. The South Asian nation has stayed away from outrightly condemning Russia despite piling pressure from the U.S. and its allies.

Crude at a discounted rate can help keep a check on prices in India, which imports 85% of its oil needs. Fuel retailers have started passing high prices to consumers, putting pressure on the government to slash fuel duties. It has so far resisted the move even as Brent crude hovers above $100 a barrel.

The finance minister also said that it would be better to have a Unified Payments Interface-like platform that can interact with another system, just like SWIFT -- the Belgium-based cross-border payment system operator.

India is considering a proposal from Russia to use a system developed by the Russian central bank for bilateral payments, according to people with knowledge of the matter. Under the plan, which is still under discussion, rubles will be deposited into an Indian bank and converted into rupees, and the same system will work in reverse.