Oil Prices Soar, Occ To Reschedule Imports

The Oil Coordination Committee (OCC) is planning to reschedule its oil imports, following a rise in world prices in the wake of a political row between Iran and Germany, and below-normal temperatures in the United States.

OCC is likely to wait a while for the prices to ease, before contracting June deliveries. The government has already contracted May deliveries when the prices were ruling easy.

World benchmark Brent blend is trading 22 cents a barrel higher at $18.15 on Londons International Petroleum Exchange. New Yorks West Texas Intermediate contracts are trading six cents higher at $19.63 a barrel.

Officials confirm that the government could have contracted higher imports in March, but for the Rs 15,500 crore deficit in the oil pool account. Since Indian Oil Corporation, the canalising agency for oil imports, did not have sufficient funds to contract higher imports, only 5 million tonnes of crude oil imports were contracted for April and May deliveries.

 

But OCC is happy that it was able to save $60 million in its oil import bill because of the contracts for import of 5 million tonnes of crude oil at lower prices in the past two months. It has been estimated that there has been a saving of $12 million on import of every million tonne of crude oil compared to the estimates in the oil economy budget.

OCC is hopeful that the Iran-Germany row would be resolved shortly and the weather in the United States, worlds leading crude oil importer, would improve, easing the pressure on oil prices.

Oil experts point out that the country should plan and contract its oil imports during May, June and July, as prices tend to harden from September onwards, when western countries enter the market in a big way to purchase oil for their winter requirements.