Terming Indian crude refining capability as unparalleled in the world, Indian Petroleum and Natural Gas Minister Dharmendra Pradhan on Wednesday asked oil cartel OPEC to stop charging the premium applicable to Asian countries like India so that competitively priced petroleum products can be manufactured.
"If we receive crude at a fair price without paying Asian Premium, our gross refining margins will improve and it will result in competitively priced petroleum products. It is in everyone's interest to refine crude in India in the most cost-effective manner," he said in his address in the Sixth OPEC International Seminar held here.
Pradhan said OPEC members need to factor in that the average Nelson Complexity Index (NCI), or the measure of the secondary conversion capacity of a petroleum refinery relative to the primary distillation capacity, of the Indian public sector refineries is 10 and of private refineries is about 14 which are higher than the European average of 6.5 and the average of 9.5 in US.
"There is a strong feeling that Asian counties like India should receive Asian dividend rather than paying Asian Premium while making bulk purchase of crude. I will not hesitate to say that Asian Premium was historically never justified and more so not justifiable in the changed market scenario where Asian countries are the major buyers," he maintained.
"I will urge upon the OPEC members to understand this genuine concern."
The minister further said that consumption of petroleum products in India is price sensitive.
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"While deciding the pricing aspect of crude oil, it should be factored in that demand of crude for domestic consumption in India will negatively respond to price rise of crude," he told the attendees.
About 85 percent of India's crude imports and 94 percent of the natural gas import comes from OPEC countries.