India's petroleum minister, Dharmendra Pradhan, is calling on OPEC oil exporters to drop their insistence that letters of credit (L/Cs) must be used in oil transactions.

The minister says oil producers should not charge premiums to Asian buyers and they should offer better trading terms by extending credit terms and by no longer demanding payment guarantees.

Better terms

Pradhan argues that India should leverage its position as one of the world's largest crude buyers 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... is our expectation," he told local media. India is the world's fourth largest oil importer.

L/C qualification

Pradhan qualified his call for L/C terms to be replaced by extended credit terms by explaining that this would apply only to India's regular and bulk buyers of crude oil.

India has been dissatisfied for many years that OPEC's buyers in the West pay less for crude than India, even though transportation costs to Western buyers are higher.

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