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Oil Apartheid: Manmohan Singh had rebuked Deora for raising it

The term refers to Arab oil producers' practice of charging Asian customers up to $6 a barrel more than what they billed US or European refiners

Oil Apartheid: Manmohan Singh had rebuked Deora for raising it
Manmohan Singh & Sonia Gandhi
Press Trust of India New Delhi
Last Updated : Oct 31 2016 | 4:30 PM IST
Oil 'apartheid' that India faces at the hands of exporting nations has been flagged by successive oil ministers but the then Prime Minister Manmohan Singh had "reprimanded" his Petroleum Minister Murli Deora when it was raised with the industry kingpin Saudi Arabia, claims a new book.

For decades, Middle East oil producers charged up to USD 6 per barrel more for the crude oil they sold to the Asian customers like India, than what they billed US or European refiners.

The so-called 'Asian Premium', that creeped in through the differential official selling prices (OSPs) countries like Saudi Arabia set by adjusting for "regional variations", has led to billions of dollars being paid by India with no official record of the payments, the book claims.

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In the book, The Lobbyists: Untold Story of Oil, Gas and Energy Sector, senior journalist Rajeev Jayaswal says the then Oil Minister Mani Shankar Aiyar first raised the "price discrimination between Asian buyers vis-a-vis European and US refiners" at the OPEC seminar in Vienna in September 2004.

"Interestingly, the issue of Asian premium was well known to all, but this matter was never raised unequivocally in any bilateral discussions. Asian premium was not officially documented or officially invoiced. This matter was always under wraps and many Gulf-based producers, particularly Saudi Arabia, publically denied its existence," says the book.

Like Aiyar, his successor Murli Deora also tried to raise the issue when he as part of Singh's official delegation on a visit to Saudi Arabia in February 27-March 1, 2010, with King Abdullah bin Abdulaziz Al Saud.

While the King, according to the book, stated that he was not aware of this matter, Deora was later "reprimanded for raising an unpleasant matter, which was not on the agenda".

Deora, the book claimed, confirmed the incidence and that he was annoyed by the PM's attitude. "We did not go to Saudi Arabia to eat food and enjoy. As an oil minister it was my duty to raise issues. He should have supported me there," it quoted Deora as having said in March that year.

Indian refiners believe that if crude was sold at par with their American and European counterparts, their refining margins would increase by up to $2 per barrel.

India imported 202.85 million tonne of crude oil in 2015-16 for Rs 4.16 lakh crore.

After coming to power, the Modi government too has taken up this matter. On June 3, 2015, the incumbent Oil Minister Dharmendra Pradhan raised this issue at an Opec seminar.

In the book, Jayaswal, who currently is business editor for Amar Ujala newspaper, presents an account of the machinations of the corridors of power, India's quest for energy security and internecine warfare between different interest groups.

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First Published: Oct 31 2016 | 3:22 PM IST

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