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India wants OPEC to review its pricing policies for the Asian market and end the premium it puts on its crude for Asia, Indian Oil Minister Dharmendra Pradhan said at the virtual OPEC-India Dialogue meeting with OPEC Secretary General Mohammad Barkindo on Thursday.
Pradhan urged the cartel, led and dominated by Middle Eastern oil producers, to address the ‘pricing anomaly’ for its oil. The minister urged OPEC “about the urgency and need to address the historical aberration in crude pricing for Asia by ending Asian Premium recognizing the shifting of demand for crude oil to Asia, which is further accelerated by Covid-19 pandemic,” Pradhan said on Twitter.
“We had discussions on the rapidly changing global energy landscape, overcoming energy challenges, global oil price mechanisms, measures being taken by OPEC and its partners for balancing oil markets, and on ensuring oil supply security for India,” he added.
“Both sides drew attention to the close cooperation and engagement in many projects and investments between OPEC Member Countries and India, and other topical issues were addressed, including the Asian Premium and term contracts,” OPEC said in a statement about today’s meeting.
India depends on OPEC for 78 percent of its crude oil demand, 59 percent of liquefied petroleum gas (LPG) demand, and nearly 38 percent of its liquefied natural gas (LNG) demand, the Indian minister said, noting that India imported US$92.8 billion worth of oil, gas, and petroleum from OPEC members in the 2019-2020 financial year.
Earlier this year, India used the ultra-low crude oil prices to top its strategic petroleum reserves with oil at $19 a barrel, saving nearly US$700 million in the process, India’s Ministry of Petroleum and Natural Gas said in September. The average cost at which India bought the crude oil in April and May was $19 per barrel, compared to $60 a barrel oil price in January 2020. Thanks to the cheapest oil in years at the start of the second quarter, India saved US$685.11 million on its crude oil import bill, the ministry said.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com