India’s state-run refiner Hindustan Petroleum Corp Ltd faces payment problems for its purchases of Russian crude due to a price cap imposed on the OPEC+ producer’s exports.
The refiner is unwilling to declare its purchase price for Russian crude, making it difficult for the company to find Western banks willing to process such payments, a company executive, who declined to be named because he is not authorized, said on Tuesday. to do it speak publicly
Sanctions imposed by the Group of Seven and the European Union starting Dec. 5 restrict the extension of banking, maritime and insurance services for Russian crude exports by members of the bloc, unless the cargo has a price below a maximum price of $60 a barrel. Since February 5, similar restrictions were implemented for exports of Russian oil products.
Earlier, HPCL had paid for barrels of Russian crude in US dollars, UAE dirhams and Russian roubles, the executive said. So far, no payment has been processed in Indian Rupees.
The executive, however, said the payment issue is unlikely to have a major impact on crude oil flows from Russia to India as alternative solutions are currently being considered, without elaborating on alternative schemes .
HPCL is estimated to process 15 million tonnes of imported crude in the current financial year ending March 31, of which two million tonnes was bought on a spot basis from Russia.
Overall, the company bought 70% of its crude on installments with 30% purchased spot this year. The percentage of spot imports will increase next year as it buys more from Russia. It is also in talks with Moscow to import crude under a forward deal.
HPCL operates refineries in Mumbai and Visakhapatnam. Its ability to process Russian crude is limited by the lack of sophisticated upgrading units that can process heavy oils.
