New Delhi: Oil Minister Hardeep Singh Puri on Wednesday said there are no payment problems in buying oil from Russia and the recent decline in purchase is a function of the discounts they offer.
He said Russian oil made up for just 0.2 percent of all the oil that India imported in February 2022, before the start of the Russia-Ukraine war.
Post the Ukraine war, some Western nations shunned Russian oil, leading to Moscow offering discounts. This led to Indian refiners lapping up the discounted oil. The discounts made Russia India's top oil supplier with a 40 percent share. The share fell when the discounts were lower.
"When the problem (Ukraine war) started, Russia started offering discounts we started buying," Puri told reporters, adding that New Delhi has diversified its sources of imports and that the country will buy at the cheapest available rates.
"There is only one requirement that Indian consumers get the energy at the most economical price without disruption. Russian imports had gone up to 40 percent. Now if they have come down to 33 percent or 28-29 percent, is it not a question of payment problem? There is no payment problem. It is a pure function of the price at which our refiners will buy it," he said.
He hastened to add that none of the companies have complained of supplies being stopped because of payment issues.
Instead, suppliers are willing to sell first and collect payments later.
"We are buying 1.5 million barrels per day of oil from Russia. 1.5 million barrels per day out of 5 million barrels per day consumption (in India)," he said. "If they don't give a discount, why would we buy it?"
On the drone attacks on shipping vessels in the Red Sea, Puri said some suppliers have changed their route and are now going through the Cape of Good Hope.
Avoiding the Red Sea and Suez Canal would mean a longer voyage but this is offset by not having to pay the Suez Canal transit fee. "So it balances out," he said.
The minister said that attacks were certainly a concern as they could potentially disrupt supplies but India was confident of navigating through the problem.
"Are we confident of handling it, absolutely," he said.
The attacks on shipping vessels had led to a rise in crude oil prices but the markets have now absorbed it. "There has to be responsible conduct between all the stakeholders. If there is irresponsible behaviour, there will be an impact. Will there be an impact on the Indian oil and gas sector, no. I want to give you full confidence that we will deal with all these situations. Yes, challenges will come but we will deal with them...We will monitor all this," he added.
The Suez Canal is used by roughly one-third of global container ship cargo and 8.2 million barrels of crude oil transits through it. Redirecting ships around the southern tip of Africa is expected to cost extra in fuel.