India needs to strengthen its domestic shipping fleet and expand crude oil and liquefied petroleum gas (LPG) storage capacity to help refiners maximise the benefits of discounted crude imports, Indian Oil Corporation (IOC) Chairman A S Sahney said on Tuesday.
Speaking at the Energy Technology and Innovation Meet in Goa, Sahney highlighted the growing burden of freight costs on Indian refiners, warning that high tanker rates were eroding the savings from discounted crude oil purchases.
“We have been neglecting shipping… we have to build our capabilities in shipping. Today we are getting crude at discount but freight is eating that up. Freight is a killing factor,” Sahney said during a panel discussion.
His remarks come amid a sharp increase in tanker freight rates for Russian crude shipments from western Russian ports to India. Rates reached record highs in early October, driven by heightened risks in the Black Sea and a global rally in tanker charges.
The situation has underscored the importance of developing India’s own tanker fleet to improve control over transportation costs, strengthen supply-chain resilience and reduce dependence on external shipping capacity.
Sahney also stressed the need to invest in additional crude oil and LPG storage infrastructure, which would provide India with a greater strategic buffer against supply disruptions and market volatility.
Expanding domestic shipping capabilities alongside storage infrastructure could help India improve energy security, manage import costs more effectively and strengthen the resilience of its energy supply chain.