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Petroleum Minister Dharmendra Pradhan reviewed on Saturday the availability of petroleum products in the light of the ongoing conflict in Iraq.
India imported about 13 per cent of its crude oil requirements from Iraq last year. In this financial year, the three public sector oil marketing companies (OMCs) had planned to import 19.4 million tonnes, a fifth of their requirement from Iraq, mostly by Indian Oil and Hindustan Petroleum (the third OMC is Bharat Petroleum). Against the 18.7 mt of import planned by these two OMCs from Iraq in 2014, half the contracted quantity has already been lifted.
It was further noted that crude oil supplies to India from there come from the Basra oilfields, well away from the conflict zone in northeast Iraq; loading of ships, including by these two, from the Basra terminal continues normally.
Even so, the OMCs were asked to prepare a contingency plan for both the short and medium term. This is to include diversification of their resources for import of crude oil to minimise the impact of any geopolitical instability in West Asia. There is no possibility of supply disruption at present and adequate supply of petroleum products through the country would be maintained by the OMCs, it was officially stated.
According to an ICRA report, with the ongoing increase in retail prices of diesel every month, the gross underrecoveries for OMCs would have materially reduced to around Rs 100,000 crore in FY 15 (from Rs 1,39,900 crore in FY14), assuming the Indian basket of crude oil priced at $108 a barrel and the dollar at Rs 60.
“However, as seen over the past few days, global crude oil prices have shown a sharp increase of $4-5 due to political tension in Iraq. The gross underrecoveries could be Rs 1,37,500 crore in FY15 (similar to FY14) at the Indian basket crude oil price of $120 and a dollar level of Rs 60,” said the report.
India imported about 13 per cent of its crude oil requirements from Iraq last year. In this financial year, the three public sector oil marketing companies (OMCs) had planned to import 19.4 million tonnes, a fifth of their requirement from Iraq, mostly by Indian Oil and Hindustan Petroleum (the third OMC is Bharat Petroleum). Against the 18.7 mt of import planned by these two OMCs from Iraq in 2014, half the contracted quantity has already been lifted.
It was further noted that crude oil supplies to India from there come from the Basra oilfields, well away from the conflict zone in northeast Iraq; loading of ships, including by these two, from the Basra terminal continues normally.
Even so, the OMCs were asked to prepare a contingency plan for both the short and medium term. This is to include diversification of their resources for import of crude oil to minimise the impact of any geopolitical instability in West Asia. There is no possibility of supply disruption at present and adequate supply of petroleum products through the country would be maintained by the OMCs, it was officially stated.
According to an ICRA report, with the ongoing increase in retail prices of diesel every month, the gross underrecoveries for OMCs would have materially reduced to around Rs 100,000 crore in FY 15 (from Rs 1,39,900 crore in FY14), assuming the Indian basket of crude oil priced at $108 a barrel and the dollar at Rs 60.
“However, as seen over the past few days, global crude oil prices have shown a sharp increase of $4-5 due to political tension in Iraq. The gross underrecoveries could be Rs 1,37,500 crore in FY15 (similar to FY14) at the Indian basket crude oil price of $120 and a dollar level of Rs 60,” said the report.
