(LiveMint)
India has for the first time allowed state refiners to buy 35% of their oil imports in tankers arranged by the seller, a document reviewed by Reuters showed, enabling them to swiftly tap cheaper cargoes. The move will help refiners in Iran’s second biggest oil market to boost purchases from alternative sources as US President Donald Trump prepares to halt Iranian oil sales through a new set of sanctions from 4 November.
The measure is part of a series of attempts by the world’s third-biggest oil importer and consumer to cut its surging oil import bill in the face of rising oil prices and a weaker Indian rupee. India had previously allowed state refiners to buy only 15.48% of their estimated 118.15 million tonnes of oil imports in the current fiscal year to 31 March on a Cost, Insurance and Freight (CIF) basis, meaning the seller arranges the vessel and insurance. The rest was largely procured on a Free on Board (FOB) basis to help Indian shipping lines and insurers.
India’s shipping ministry told the country’s oil ministry about the move in a letter dated 19 September. “Advance NOC (no objection certificate) is now granted to oill marketing companies to further import crude up to 23.07 million tonnes (balance 19.52%),” it said.
