PSU refiners seek higher discounts on Cairn crude | business | Hindustan Times
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PSU refiners seek higher discounts on Cairn crude

State-owned refiners Indian Oil Corp, HPCL and MRPL have asked Cairn India to give higher discounts on the crude oil produced by it from its oilfields at Barmer in Rajasthan.

business Updated: May 21, 2009 22:19 IST
HT Correspondent

State-owned refiners Indian Oil Corp, HPCL and MRPL have asked Cairn India to give higher discounts on the crude oil produced by it from its oilfields at Barmer in Rajasthan. Cairn’s Indian crude is a viscous variety that will sell at a discount to light crude.

Government sources said a new formula based pricing the oil is still being worked out. “The formula pricing will be based on the Gross Product Worth (GPW) differential. As per this formula the discount works out to be 14 to 15 per cent when benchmarked to the crude variety that is close to Dubai crude,” said a senior Petroleum Ministry official.

“They are talking about benchmarking Cairn’s crude to some South African variety of crude. Discussions are going on and a likely agreement is expected shortly,” he said.

Indian Oil Corp —in the meetings held last fortnight—agreed in principle to buy 1.97 million tonnes of crude from the Cairn’s Rajasthan block during 2009-10 at $2.47 per barrel lower than the Bonny Light variety of crude.

However, this understanding was subject to MRPL and HPCL’s discussions with Cairn said a senior IOC official. “Discussions are on and a final pricing is expected anytime.”