In a move to help the chances of a trade deal with the United States, India intends to raise imports of U.S. liquefied petroleum gas (LPG) and reduce such purchases from the Middle East, anonymous sources familiar with the plans told Reuters on Thursday.
State-owned refiners in India have informed their traditional large LPG suppliers from the Gulf – Saudi Arabia, Kuwait, the United Arab Emirates (UAE), and Qatar – that they should expect potentially lower nominations for their product from India, according to Reuters’ sources.
Earlier this month, tender documents reviewed by Bloomberg showed that India’s biggest state-owned oil companies seek long-term supply of the cooking fuel from the United States for the first time.
India has long-term deals to procure LPG from Saudi Arabia. Now it seeks U.S. LPG supply, after signaling it would look to buy more of America’s energy products to appease the U.S. Administration and prompt it to review the 50% tariffs on Indian goods.
The U.S. introduced the massive tariff in early August, doubling the previous 25% tariff due to India’s continued imports of crude oil from Russia.
Indian officials are currently discussing trade relations with the U.S. in Washington.
In the latest development in India’s energy procurement policies, U.S. President Donald Trump said on Wednesday that India had agreed to cut imports of Russian crude oil.
According to the U.S. President, India’s Prime Minister Narendra Modi had assured him that Indian refiners would stop buying Russian crude “within a short period of time”.
Russian oil imports account for about a third of all crude arrivals in India, which has significantly boosted Russian crude buying in the past three years.
Officially, India on Thursday neither confirmed nor denied that it would indeed cut or halt imports of Russian crude.
In response to comments on India’s energy sourcing, Randhir Jaiswal, an official spokesperson for the Foreign Ministry, said “India is a significant importer of oil and gas. It has been our consistent priority to safeguard the interests of the Indian consumer in a volatile energy scenario. Our import policies are guided entirely by this objective.”
By Tsvetana Paraskova for Oilprice.com
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