The government has worked out a contingency plan to ensure that there is adequate supply of crude oil to Indian oil refineries from May onwards when the US lifts the waivers from its Iran sanctions given earlier to major oil importing countries, including India.
"The government of India has put in place a robust plan to ensure that there is adequate supply of crude oil to Indian oil refineries from May 2019 onwards. There will be additional supplies from other major oil producing countries from different parts of the world," a Petroleum Ministry statement said on Tuesday.
"The Indian refineries are fully prepared without any problem to meet the national demand for petrol, diesel and other petroleum products in the country."
The government machinery issued this assurance following US President Donald Trump's decision on Monday to end the waiver allowed to India to buy Iranian oil coupled with the threat of sanctions if New Delhi does not comply with the embargo.
Announcing the end of waivers in Washington, White House Press Secretary Sarah Huckabee Sanders said: "Trump has decided not to reissue significant reduction exceptions (SREs) when they expire in early May."
The sanction waiver ends on May 2.
India imports close to 10 per cent of its domestic oil requirement from Iran. Though the imports fell slightly in 2018-2019 following the US sanctions, it is still significant at close to 20 million tonnes per annum.
Iran is also a commercially attractive oil exporting country as it offers better terms for oil to India including a 60-day credit period and discounts on oil and insurance.
"We have alternatives in place to replace Iran oil. There would not be any disruptions from next month," an official of a state-run oil company told IANS.
India imports over 80 per cent oil its oil needs mainly from countries such as Saudi Arabia, Iraq, Iran, Venezuela and a few African and Latin American countries. It has started importing oil from the US over last few years, the quantum of which is expected to rise in coming months.
The US has already indicated its intent to increase oil exports to India and offer Indian companies better sale terms.
Indian oil imports stood at around 220 million tonnes in 2017-18 and are expected to remain at around same level in 2018-19.
As part of its initiative on energy security, India is already talking to countries like Mexico and Brazil to increase oil imports from them. Besides, a rupee trading mechanism is being explored with countries such as Venezuela and Iran, which face US sanctions, to by-pass restrictions and continue oil trade on a limited scale.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)