INDIA MULLS JOINT ACTION BY OIL BUYERS

THE MOVE LIKELY TO SUPPORT BATTERED RUPEE

New Delhi, Sept. 24: With oil traders forecasting crude oil to rise to $100 a barrel by the end of the year, Indian refiners are considering cutting back their imports and relying more on cheaper crude already stored in inventories, according to industry executives.

India’ petrol prices are among the highest in the world in terms of how much it costs as a portion of gross domestic product per person.

R. Ramachandran, the head of refiners at BPCL, also confirmed that the meeting, which included all of India’s refinery companies, took place and that refiners may cut their imports.

“We are looking at various options to contain the costs including reducing our inventory. This will be a coordinated effort among refiners”, he said. “If need be, we will talk to other countries for a coordinated effort.”

Other Indian refiners including Hindustan Petroleum, Reliance Industries and Nayara Energy did not respond to emailed requests for comment sent on Sunday. Mangalore Refinery and Petrochemicals declined to comment.

Shares in Indian refiners were trading lower amid a wider sell off in the markets.

India imports more than 80 per cent of its oil needs. The country imported 4.4 million barrels per day (bpd) oil in August, costing about $12 billion, according to government data. India’s crude inventory levels are not made public. Using up crude inventories could save Indian refiners shortterm import costs but poses the risk that if prices do not ease later on the companies will have to import more later at higher prices.

Despite this, the government supports the plan, the two unidentified sources said.

Former BPCL chairman R.K. Singh said India’s state refiners had resorted to this strategy in the past.

— Reuters