Oil firms asked to diversify import basket

The government on Friday said that though there was no disruption in the supply of crude oil from Iraq at present, state-owned oil marketing companies have been asked to prepare for diversification of their import basket. 

They will also have to draw up a contingency plan to import more from their existing linkages. 

According to government data, India imported about 13 per cent of its crude oil requirements from Iraq last year. 

In the current year, oil marketing companies had planned to import about 20 per cent or 19.4 million tonnes of crude oil from Iraq.

Petroleum Minister Dharmendra Pradhan said that crude oil supplies to India came from the Basra oilfields, which were far from the conflict zones. 

However, with the recent increase in international crude oil prices in the wake of the Iraq crisis, the government was not in a hurry to take measures in terms of fuel pricing norms to ease the burden on oil marketing companies.

Indian oil refineries are likely to suffer higher revenue losses on subsidised fuel sale due to a rise in global crude prices.

Public sector oil marketing companies — Indian Oil Corp Ltd, Hindustan Petroleum Corp Ltd and Bharat Petroleum Corp Ltd — sell diesel, cooking gas and kerosene at subsidised rates.The revenue loss on subsidised fuels is calculated on the basis of global crude prices and the exchange rate.

Losses on sale of diesel faced by oil marketing companies had dropped to as low as Rs 1.62 per litre, but are seen rising with the Indian crude basket going up to around $112 per barrel.