Fuel at concessional rates from Russia
Russia and other major powers have imposed sanctions on Russia following the attack on Ukraine. The United States has banned the purchase of crude oil from Russia. India is the world's third-largest oil importer. Eighty-five percent of the total oil requirement is imported.
The huge rise in crude oil prices in the commodity market has made oil imports costly for India. As a solution to this, the Modi government has decided to import fuel from Russia. Europe and the United States have imposed sanctions on Russia over its war with Ukraine. Therefore, Russia will also have to find another big market. Taking advantage of this opportunity, India has decided to buy oil from Russia.
In the wake of the war between Russia and Ukraine, the central government has bought cheap crude oil from Russia. Indian Oil on Monday signed an agreement with Viotel to buy 3 million barrels of crude oil from Russia. The oil will enter the country in May. According to sources, this is the first deal between the central government and Russia since the invasion of Ukraine last month.
Russia and other major powers have imposed sanctions on Russia following the attack on Ukraine. The United States has banned the purchase of crude oil from Russia. India is the world's third-largest oil importer. Eighty-five percent of the total oil requirement is imported. To date, two to three percent of the total crude oil has been procured from Russia. Despite the rise in international crude oil prices following the invasion of Ukraine, it is time for Russia to sell cheaper oil, as other countries refuse to buy. Taking this opportunity, the Center has now started buying cheap oil from Russia.
The European Union (EU) has imposed sanctions on Russia-linked Rosneft, Transneft, and Gazprom Neft. Indian Oil had last bought oil from Russia in April 2020.
- Russia has also decided to supply fuel at a discounted rate in response to this.
At least 45 lakh barrels of oil per day are expected to be imported from Russia at a discounted rate.
- Transportation costs and insurance costs will be borne by Russia.
- However, it is not yet clear in which currency the transaction will take place.
- In general, crude oil trades in dollars in the global market.
India imports 85% of its total fuel demand.
In the current financial year, from April to January 2022, 36 lakh barrels of oil were imported from Russia. It accounts for 2% of total oil imports.