India's state refiners are hoping for better letter of credit (L/C) terms as they jointly negotiate oil purchase deals with OPEC producers.

The refiners have never before entered into such negotiations, and are taking advantage of low oil prices and plentiful supplies of crude as well as a shift in the balance of power from oil producers to buyers.

No discount

The OPEC producers are expected not to discount selling prices, but they have reportedly been prepared to consider concessions on loan terms and shipping that would reduce costs.

Benefits anticipated by the refiners include relaxations in L/C terms, enhanced credit terms and choice of oil grades.

Joint negotiations

The refiners have been in negotiations with suppliers in Abu Dhabi, Kuwait and Saudi Arabia for the past two months.

Officials from Indian Oil Corp, Bharat Petroleum Corp, Hindustan Petroleum Corp and Mangalore Refinery and Petrochemicals Ltd have visited the suppliers.

These four refiners control more than one-half of India's refining capacity and are negotiating jointly to increase their bargaining power.

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