The Parliamentary Standing Committee on Petroleum has flagged the need for importing a wider ranges of crude oil grades so that the cost of the Indian crude basket is reduced.
Key points
- The Indian crude basket represents a derived basket comprising Sour grade (Oman & Dubai average) and Sweet grade (Brent Dated) of crude oil processed (indigenous and imported) in Indian refineries during the previous financial year.
- While about 250 grades of crude oil are traded in the global crude market, Indian refineries buy only about 50 grades of crude oil in a year, the committee noted.
- The Indian crude basket is used as an indicator of the price of crude imports in India, and the government watches the index while examining domestic price issues.
Sweet and Sour crude
- The terms sweet and sour crude are a reference to the sulfur content of crude oil. Crude is currently considered sweet if it contains less than 0.5% sulfur.
- Sweet crude is easier to refine and safer to extract and transport than sour crude.
- Sweet crude is found include the Appalachian Basin in Eastern North America, Western Texas, the Bakken Formation of North Dakota and Saskatchewan, etc.
- Sour crude oil will have greater than 0.5% sulfur and some of this will be in the form of hydrogen sulfide. Sour crude also contains more carbon dioxide.
- Crude produced by OPEC Member Nations tends to be relatively sour.
Light vs Heavy Crude
- The Crude oil is categorized as heavy and light based on API Gravity weight.
- API Gravity scale was created by the American Petroleum Institute to measure the density of oil.
- The higher the API, the lighter the oil. The lower the API, the heavier the oil.
- Heavy oil evaporates slowly and contains material that will be used to make heavy products like asphalt.
- Light oil requires less processing and produces a greater percentage of gasoline and diesel than heavy oil.
