Government asks PSU refiners to review Saudi oil deals
Why is it in news?
- India has asked its state refiners to review contracts for buying crude oil from the West Asian nation and negotiate more favourable terms.
- There are tensions between India and Saudi Arabia over oil production cuts.
- India is keen to break the producers’ cartel dictating pricing and contractual terms.
- Government has told Indian Oil Corporation (IOC), BPCL and HPCL to look for supplies from outside the region and use collective bargaining power to get favourable terms.
- India imports 85% of its oil needs and is often vulnerable to global supply and price shocks.
- When oil prices started to rise in February, it wanted Saudi Arabia to relax output controls but the Kindgom ignored its calls.
- This has led to the government now pressing for diversification of the supply base.
Source: The Hindu.