India has expressed its concern over high oil prices to Saudi Arabia and the UAE as it is adding to the inflationary pressure on an economy struck by the coronavirus.

Petroleum minister Hardeep Puri is in talks with the UAE to press for a reduction in the rate on long-term supply contracts.

Puri’s predecessor, Dharmendra Pradhan, was rebuffed by the Saudis when he had approached them for a similar cut.

A day after he spoke to his UAE counterpart, Puri spoke to Prince Abdulaziz bin Salman al Saud, minister of energy of Saudi Arabia. He had on Saturday spoken to his Qatari counterpart.

Puri in a tweet said he “conveyed my desire to work with Prince Abdulaziz to bring greater predictability and calm in the global oil markets, and also to see hydrocarbons become more affordable”.

Favourable terms

During the talks, sources said India tried to press for favourable contract terms and also to end the Asian premium charged by Riyadh. This premium is the extra the Asian countries pay to Opec even as the oil cartel sells crude to the US and Europe at a discount.

State oil producer Saudi Aramco last week had set the August official selling price for the flagship Arab light crude at $2.70 a barrel, higher than the Oman/Dubai average for Asia and up 80 cents from July.

However, it is selling the light crude at a discount of $1.10 a barrel against Brent for August compared with a discount of $1.90 for July.

Indian companies buy two-thirds of their purchases on term or fixed annual contracts, which ensure assured supplies but the pricing and other terms favour only the seller.