Oil refiners in India have been asked by government to look for other options than the Middle East, according to sources. The suggestion to diversify oil import comes on the heels of the continued production cuts by OPEC leading to rise in prices, says a Reuters report.
India, the world's third biggest oil importer and consumer, imports about 84 per cent of its overall crude needs with over 60 per cent of that coming from
Middle Eastern countries, which are typically cheaper than those from the West.
Most of the OPEC producers, led by world's top exporter Saudi Arabia, last week decided to extend most output curbs into April. India, hit hard by the soaring oil prices, has urged producers to ease output cuts and help the global economic recovery. In response, the Saudi energy minister told India to dip into strategic reserves filled with cheaper oil bought last year.
"We have asked companies to aggressively look for diversification. We cannot be held hostage to the arbitrary decision of Middle East producers. When they wanted to stabilize the market we stood by them," said a government source.
While initial costs could be high, the strategy will pay off in the long term, the source said. Two oil refiners confirmed that the government had asked them to expedite efforts to diversify crude import sources.
