New Delhi: India imports most of the crude oil it consumes, but its refineries turn that imported crude into a major export business in petrol, diesel and aviation fuel. The scale of this trade is significant. The country is now set to supply Mauritius with petroleum products under a new five-year agreement.
During Petroleum Minister Hardeep Singh Puri’s August 20-21 visit to country, the Indian Oil Corporation (IOC) signed a long-term sales and purchase agreement with Mauritius’ State Trading Corporation. The country has therefore built an export business around its ability to process crude rather than around domestic oil production. India and Mauritius also signed a government-to-government memorandum of understanding (MoU) covering oil and gas cooperation, training, capacity building and biofuels.
Under the deal, the IOC will supply the island nation’s entire import requirement of petrol, high-speed diesel and aviation turbine fuel for five years. The agreement is the first long-term supply arrangement of this kind by an Indian public-sector oil marketing company outside South Asia in recent years. It also comes at a time when disruptions in international energy supplies have made reliable fuel sources more important for many importing countries. The Mauritius agreement shows how this refining capacity can translate into an overseas supply business. The IOC will now meet the island country’s full import requirement for motor spirit, high-speed diesel and aviation turbine fuel under the five-year contract. India’s location also helps. Refineries on the western coast can receive crude transported by sea and send finished products to markets in Asia, Africa, Europe and other regions. The Mauritius deal captures that model in a simple way. India does not need to produce all the crude it processes. It can import crude, refine it into products that meet market requirements and supply those products to countries that need fuel.
