New Delhi, Oct 29: In a significant development, the government is planning to purchase oil from Venezuela after the US lifted sanctions on exports of Venezuelan crudes, which, until a few years ago, accounted for a tenth of India’s crude oil imports.

 

Earlier this month, the US had eased oil, trade, and financial sanctions on Venezuela. The "general license" issued by the Treasury permits previously prohibited activities for a six-month period. The sanctions had come after in 2019, the administration of Donald Trump placed strict sanctions on the country, as it sought to oust Nicolás Maduro by recognising Juan Guaidó presidency in Venezuela.

 

The Ministry of External Affairs spokesperson Arindam Bagchi said India would make decisions about importing crude from Venezuela depending on the country's overall demand outlook. "We will we start buying oil if the sanctions are diluted. Look, as I said, our perspective on this - and this will be answered in the context of other countries where we managed to procure oil - is guided by our energy security requirements, how we look at it. So, depending on that a decision is taken. We would of course, for the benefit of our own people, like to have more sources and access to energy, and particularly oil," he said.

 

"So, that is something that I wouldn’t like to speculate, but the larger principle that guides it is ensuring the energy security of India," he added.

 

Besides, India's top oil firm ONGC is hoping to recover about USD 413 million of unpaid dividend from an oilfield in Venezuela after sanctions on the Latin American nation were eased, according to report by PTI.

 

ONGC Videsh Ltd, the overseas investment arm of state-owned Oil and Natural Gas Corporation (ONGC), holds a 40 per cent stake in the San Cristobal oilfield in eastern Venezuela's Orinoco Heavy Oil belt after a deal was signed between both the companies.

 

During January-September, India's oil demand rose 5.6% on the year to 171.34 million mt, or 4.9 million b/d, according to data from the Petroleum Planning and Analysis Cell. Over the same period, diesel and gasoline demand rose 6.5% and 7.4% on the year, respectively. Demand for jet fuel increased 20.5% on the year, while it was up 3.7% year on year for naphtha over January-September.

 

India used to buy oil from Venezuela till 2020 but stopped it when US slapped sanctions on it. Indians might continue to pay lowest fuel price if such deals are signed. So, India will have options to purchase oil apart from Russian crude oil and it might rely less on Russia for the same.