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Oil price must be 'reasonable': Pradhan to Saudi

New Delhi: India on Friday asked the world's largest oil producer Saudi Arabia for a "reasonable" oil pricing that balances the interest of producer and consuming nations.
After talks with visiting Saudi oil minister Khalid Al- Falih, Petroleum Minister Dharmendra Pradhan said India is a price sensitive market and so "we must get reasonable price for crude oil and LPG" imported from the OPEC nation.
Saudi Arabia is india's second biggest source of crude oil after Iraq. This fiscal it will import 36.5 million tonnes of crude oil from Saudi Arabia. Also 25 per cent of LPG also comes from the Gulf nation.
"What we discussed was that price of crude oil is such that it does not result in a loss to producers and at the same time protects consuming nation's interest," he said. "They (Saudi Arabia) was in agreement on the issue."
Some mechanism will need to be deviced to address this, he said.
India is world's third-largest oil importer, which relies on foreign countries to meet 80 per cent of its needs. About 85 per cent of its total oil imports and 95 per cent of gas imports come from OPEC nations.
Pradhan said India has been asking the Organisation of the Petroleum Exporting Countries (Opec) to stop charging the premium from its Asian buyers.
He reiterated New Delhi's decade-old demand and said oil producers should work towards "responsible price", which would allow major oil-consuming countries to provide energy to the common people at affordable rates.
Pradhan's predecessors, particularly Mani Shankar Aiyar, had in the past raised the issue of so-called charging premium from Asian buyers, but the cartel has refused to act on the issue.
Pradhan said Saudi Arabia is India's most reliable partner, supplying close to a fifth of country's oil needs. Saudi Aramco, the Gulf nation's flagship oil firm, sells 36.5 million tonnes of oil annually to India.
It had previously been interested in new greenfield refineries set up in India but none of the interests materialised in investments. The world's biggest oil producer was interested in the 9 mt Bhatinda refinery but exited the project in 1998. Thereafter, the refinery was set up by HPCL in joint venture with steel baron Lakshmi N Mittal.
Saudi Aramco had also initially shown interest in IOC's 15 mt Paradip refinery in Odisha but walked out of the project in 2006. The Indian Oil Corp (IOC) set up the refinery on its own thereafter.
The refinery-cum-petrochemical complex on the west coast is expected to be commissioned by 2022.
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