MoP&NG calls CREA's report on price cap coalition as 'misleading'

New Delhi: In a series of tweets, the Ministry of Petroleum and Natural Gas calls out the findings of a report titled, "The Laundromat: How the price cap coalition whitewashes Russian Oil in third countries" published by the Centre for Research on Energy and Clean Air (CREA) and said that it is 'misleading'. Further, the Ministry stated that "it is a deceptive effort to tarnish India's image, the 4th largest oil refining country globally. It shows a lack of understanding of global supply-demand dynamics and India’s long history as a major refined products exporter."

CREA Report

The report by CREA claimed that India is among the top five countries, including China, that is purchasing cheap Russian crude oil and converting it into refined petroleum products, which are “laundered” in Europe and G7 countries. Further, the report said, "China, India, Turkey, UAE, and Singapore are increasing Russian crude oil imports offered at a discount to these willing buyers that are not imposing sanctions on Russian crude oil. These countries are then refining this crude oil and exporting more refined oil to sanction-imposing countries, increasing oil product exports to price-cap coalition countries by 10 million tonnes in the year after the invasion compared to the prior year. This is a legal method of laundromat countries purchasing Russian crude and exporting the refined oil products to sanction imposing countries by masking the origin of the oil."

Further, the report executes a provocation by saying, "This process provides funds to Putin’s war chest through the purchase of Russian crude that ends up as refined products in sanction-imposing countries." The report also claimed that "all five laundromat countries exported higher volumes of oil products to price-cap coalition countries one year after Russia’s invasion compared to the prior 12-month period. India exported the highest volume of oil products to price cap coalition countries one year since Russia’s invasion shipping 14.8 million tonnes, registering a 2.4 percent increase on the prior year in volume terms but a 48 percent rise in value terms (due to the rise in oil product prices which provides higher incentives or profits for refineries undertaking these exports of refined products)."

Sikka & Vadinar ports are top imports of Russian Oil: CREA

The report also said that all five laundromat countries are providing funds to the Kremlin through higher imports of Russian crude in the prior year, enabled through the product imports by the price cap coalition. The CREA report has also pointed out that Sikka and Vadinar ports in India are among the top ports that are importing Russian crude oil and exporting refined petroleum products to Europe. The report claims that Sikka port, which serves RIL’s Jamnagar refinery, is the biggest oil product export port to the price-cap coalition countries, and the largest importing port in the world of seaborne crude oil from Russia. It also claims that the Vadinar port is of great value to the Russian oil industry, especially Rosneft. The Vadinar oil refinery, owned by Nayara Energy, is located near the port, and Rosneft possesses a 49.13 percent share of Nayara Energy. "This situation where a Russian company owns an oil refinery in a third country highlights a possible way of circumventing sanctions," the report added.

Ministry's Response

In response to this, the Ministry said, "As a sovereign country, India is free to import or export goods and commodities within the terms of international law and calling its legitimate business a 'laundromat' implies an illegal activity to which India strongly objects."

"Crude Oil imports below USD 60 from Russia or elsewhere are not under any international embargo. There is also no self-embargo by 'coalition country' on buying Diesel 4m refiners around the world. To use a word like 'Whitewashed oil' is disingenuous at best or mischievous at worst," the Ministry retaliated.

India meets its energy requirements through imports from multiple countries including Russia. India has never shied away from this fact nor is it apologetic about it as evidenced by multiple ministerial statements over the last year, it added. Further, it said that "As far as exports go, as the largest democracy and a country governed by law, companies in India are free to run their businesses as per law and the government does not put restrictions on them in their legitimate business pursuits."

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