India’s public sector refiners Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL) are scouting for more crude oil term contracts on favourable terms as they look to reduce the share of spot cargoes in their oil imports and diversify their crude supply basket amid volatility and uncertainty in the international oil market, sources with direct knowledge of the matter said.
India is the world’s third-largest consumer of crude oil and depends on imports to meet over 85 per cent of its requirement. Currently, about 70 per cent of the public sector refiners’ oil imports are through term deals, while the rest are through spot purchases, a senior government official said. Spot contracts, as the name suggests, are immediate purchases from suppliers or traders with the shortest-possible delivery cycle. On the other hand, term contracts are longer-term deals for oil purchases with fixed volumes and pricing mechanisms.
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