Murky Deal, Mystery Refiners! Who Made Big Money From Russian Oil?

Who profited from cheap oil imports from Russia? The country or two Gujarat-based private refineries! The billion-dollar question, raised in media reports recently, has resurfaced. Rajya Sabha MP Jawhar Sircar has raised this issue in a letter to the Ministry of External Affairs.

The All India Trinamool Congress' Sircar has alleged that two Gujarat-based private refiners have profiteered from re-exporting Russian crude meant for India. Sircar is a Rajya Sabha member of parliament from West Bengal.

The letter addressed to External Affairs Minister S Jaishankar on May 8 sought information on which of the Indian refiners have profited from India's stand on Ukraine and to what extent, by shipping Russian oil through handling logistics and re-exporting it at mind-boggling rates to geographies like the European Union and other countries.

While the letter alleges two Gujarat-based refiners have profited, it does not disclose their names and seeks the foreign minister's attention on the issue.

BQ Prime has reviewed a copy of the letter to the foreign minister. The letter claims that his previous letter to the petroleum minister seeking an answer to the same query has remained unanswered for over a month.

Sircar claims that such a vast operation involving Indo-Russian relations could not have taken place without official patronage and assistance.

He also refers to two news items which appeared in 'FT.com' and 'The Wire'. Sircar say, "FT.com mentions how a mysterious Gatik Ship Management of Mumbai suddenly procured 54-oil-tankers last year - only to benefit from Russian Oil." He further quotes the newspaper to say that it has transported more than half of the 83-million barrels of Russian crude and oil products brought to Indian ports.

BQPrime independently verified the status of Gatik Ship Management on the Ministry of Corporate Affairs website. And no information on the company was available on the MCA website.

The lawmaker from West Bengal has sought answers, as the Indian private refiners could have only imported the cheap crude oil due to India's stand on the international stage on the Russian-Ukraine war and Russian crude.

He claimed that the low-priced imports have not helped in reducing prices for domestic customers, adding that the two Gujarat-based private refiners have made unprecedented profits from re-exporting Russian crude meant to be imported to India.

The market share of crude oil imports from Russia, which stood at less than 1% before the start of the Russia-Ukraine conflict in February 2022, rose to 1.64 million barrels per day in March, taking Russia's share to nearly 34%. It is not clear whether these include the re-exported Russian crude.

Crude oil imports from OPEC countries declined to 59.5% of total imports during April–March 2022–23 as compared to 71.6% during April–March 2021–22, according to the date released by the Petroleum Planning and Analysis Cell. India imported crude oil worth $158.3 billion in FY23, the government body said.

The government body disclosed that domestic crude oil and condensate production were down by 1.7% and 2.8%, respectively, during FY23 and in the month of March 2023, as compared to the corresponding period of the previous year. The decline comes as the government imposes a windfall tax on crude production from domestic fields. This was set off by crude oil imports, which increased by 8.9% in March and 9.5% during FY23, respectively, as compared to March 2022 and the financial year ended FY22.