No stopping Russian oil imports to India

KOCHI: Despite tariff threats and trade deals put forward by US President Donald Trump, India cannot completely stop buying crude oil from Russia. Although public sector oil companies have significantly reduced their purchases of Russian oil in the wake of the US trade deal, the central government never announced that it would stop imports. Nayara, the country's second-largest private oil company, will continue to be forced to buy Russian crude. Russian energy giant Rosneft owns 49.13 per cent of Nayara, which has a refinery in Gujarat with a production capacity of four lakh barrels per day. In January, Nayara imported 4.71 lakh barrels of crude from Russia per day. This is 40 per cent of India's total Russian oil imports. Due to European sanctions, there is limination for Nayara in buying oil from other places.

Meanwhile, companies including Reliance Industries are planning to buy crude from Russian suppliers that are not subject to US sanctions from next month.

Long-term deal with Reliance

Reliance Industries has a long-term deal with Russia's Rosneft to buy 500,000 barrels of crude for its refinery complex in Jamnagar. Reliance last bought Russian crude in December. The companies are planning to do business with companies other than Rosneft and Lukoil.

The central government has not yet clarified its policy on buying Russian oil. Commerce Minister Piyush Goyal had said the other day that it is upto domestic companies to decide on purchasing Russian crude oil and has nothing to do with the contractual framework. He added that various refineries will take commercial decisions considering market conditions.

If India completely stops importing Russian oil, it could have a huge impact on the market. If supplies are disrupted, fuel prices will soar. The decision will also negatively affect India's economic growth.