India not considering buying Russian oil in rupee: Minister

New Delhi: India has no plans to pay in rupees for the Russian oil its public sector companies buy, Parliament was informed on Monday.

India buys less than one per cent of its total oil imports from Russia. But western sanctions against Russia for its invasion of Ukraine have given way to talk of a rupee trade for the oil and gas purchases.

"At present, oil public sector undertakings neither have any contract nor is any such proposal under consideration from Russia or any other country for the purchase of crude oil in Indian rupees," Minister of State for Petroleum and Natural Gas Rameswar Teli said in a written reply to the Rajya Sabha.

He did not elaborate.

State-owned Indian Oil Corporation (IOC) has bought two parcels or shiploads of distressed Russian oil through traders at deep discounts. IOC bought 3 million barrels in each trade through European trader Vitol.

Separately, Hindustan Petroleum Corporation Ltd (HPCL) bought two million barrels of Russian crude Urals through a trader.

Western sanctions on Russia over its invasion of Ukraine have prompted many companies and countries to shun its oil. This has led to Russian crude being available in the market at deep discounts.

To capture the opportunity, Indian refiners are floating tenders to buy such discounted oil. The tenders are mostly won by traders, who would have stocked inventories of the cheap Russian oil.

Since 2020, IOC has had a term or fixed volume deal to buy crude oil from Russia's Rosneft. But, it rarely imported volumes under the term deal as the cost of transporting the oil from Russia made it uneconomical.