India ‘waiting and watching’ Iran issue unfold before taking a decision: Pradhan

Dharmendra Pradhan  

India is “waiting and watching” the unfolding events surrounding the U.S.’ announcement that it will impose sanctions on any country importing oil from Iran after November 4, according to Petroleum Minister Dharmendra Pradhan.

“We will take a decision which will serve India’s best interests,” Mr Pradhan told The Hindu . “We are waiting and watching on the issue.”

Separately, in an interview, the Minister also said that India was open to doing business with any country that was willing to offer favourable terms on oil. He added that the size and growth potential of the Indian market was such that it had played a large role in convincing the OPEC countries to increase their supply by one million barrels per day, and also in mitigating some of the higher costs incurred by the ‘Asian premium’ charged by Middle Eastern countries.

“The Asian premium issue will be resolved when it is, but in the meantime, haven’t we seen Qatar renegotiate its gas prices,” Mr. Pradhan said. “Did we not have a major role in convincing the OPEC countries to increase their production? What compelled the OPEC nations to revisit the topic of a production cut and commit to produce an additional 1 million barrels per day? The reason is India’s market strength. It’s not our claim, it can be checked in the OPEC proceedings.”

“We are open to anybody, starting from China to the U.S.,” he added. “Whoever gives us oil and gas on good terms, we will do business with them.”

The Minister went on to highlight the good relationship India was fostering with West Asia and how this was to India’s benefit.

Field in West Asia

“They (the UAE) will open the bid round in 3-4 months in which India is looking at participating in partnership with a UAE company,” Mr. Pradhan said. “India’s relationship is stronger than it has ever been with countries like the UAE and Saudi Arabia. Did we ever have a producing field in the Middle East? We had in Russia, Sudan, Canada, but not where the oil is! For the first time, through a nomination route, the UAE gave it first to India and only then to Japan.”

Speaking on petrol prices in India and whether increased production by the OPEC nations would have an effect on them, Mr. Pradhan said that there “should be an effect on prices, but slowly”.

However, the Minister was guarded about when petroleum products would be brought under GST, saying that both the Centre and States have financial imperatives to keep the status quo taxation on fuels intact.