Pradhan wants global producers to price oil 'reasonably'

Seeking reasonable pricing of oil, Petroleum Minister Dharmendra Pradhan today said oil producers should stop charging premium from its Asian buyers and offer better trade terms like selling oil without payment guarantee and on extended credit period.
India, he said, wants to leverage its position as a big buyer to corner favourable deals in an oversupplied market.
"We need good deals, that's our constant demand. That India as a big buyer of crude oil should get reasonable price in future is our expectation," he told reporters here.
Reiterating New Delhi's decade-old demand, he said the Organisation of Petroleum Exporting Countries (OPEC) is not justified in asking Asian buyers to pay more so that transportation cost to distant consumers particularly in the West can be subsidised.

Pradhan said producers need to be "reasonable and responsible" in pricing of oil.
"There is a strong feeling that Asian counties like India should receive Asian discount rather than paying Asian premium while making bulk purchase of crude. I will not hesitate to say Asian premium was historically never justified and more so not justifiable in the changed market scenario where Asian countries are the major buyers," he said.

"Any measure that erodes the advantage of geography for Asian countries and promotes a policy of subsidising oil traffic to distant destinations is not, and cannot be, in the interests of sustainable development."

The world's fourth-largest petroleum consumer wants OPEC to revisit its policy of seeking letter of credit as payment guarantee from regular and bulk buyers and demanded that it consider extending the credit time for crude import.
Pradhan said he will continue to press for a favourable oil pricing at international forums, including the OPEC summit in Vienna in June.
He said like consumers of petrol and diesel who benefited from a fall in international oil prices, users will gain if gas prices remain soft and come down from October.