Companies Offer Oil Price Cut In India

Press, Volume XCIX, Issue 29260, 19 July 1960, Page 24

Companies Offer Oil Price Cut In India

(N.Z. Press Association—Copyright)

NEW DELHI, July 17. Two major British and American oil companies operating in India have offered to cut crude oil prices “to meet the commercial challenge by Russia in the Indian market,” oil industry sources said today. The sources said that Britain’s Burmah Shell Company had offered a 7J per cent, reduction on supplies from the Persian Gulf. A similar reduction had been offered by the United States Standard Vacuum Company, but United States sources said they believed that the Standard Vacuum cut might be slightly bigger. The price concession was offered shortly after Burmah Shell, Standard Vacuum, and a third Western company, the American Caltex Company, refused an Indian Government request to refine Soviet crude oil offered at a substantial mark-down in price. One oil company source said that the price cut was not a discount but a concession, because it was felt that “this was a con-

tribution which could be made towards meeting India’s foreign exchange liabilities.” The Indian Government allocates about 400 million rupees (£3O million) annually in foreign exchange for Western crude oil. When the Soviet Union offered to come into the market, India was told that rupees would be accepted in payment. Indian officials said that Soviet oil would have helped the country’s foreign exchange position, and they were disappointed that the Western companies, which control refining capacity in India, refused to handle imports from Russia. The oil industry sources said that the Indian Government told at least one oil company that the price concession offered was “too little.” The sources said that the oil companies were concerned over a general world surplus of crude supplies and felt that the Soviet challenge had to be answered. Last week the Indian Government concluded a deal to buy 1,500,000 tons of Soviet petroleum products at a cost of 200 million rupees (£l5 million). Crude oil was not included in the agreement, which covers mostly kerosene and diesel oil.