Bonny Light benchmark for Mumbai High crude

Vol 7, PW 2 (09 Apr 03) News in Brief

ONGC has won a significant victory in its fight to receive the market price for its Mumbai High crude.

Indian Oil, Bharat and Hindustan Petroleum have accepted an ONGC demand to benchmark Mumbai High crude against Nigeria's Bonny Light, and not, as they were insisting, to Dubai Light. This was a key issue blocking a crude oil sales agreement between ONGC and the three state-owned refiners.

Indian Oil has already signed the agreement with ONGC but Bharat and Hindustan Petroleum are still sorting out the "finer details." IOC will now pay ONGC a price equivalent to the FOB price of Bonny Light for its Mumbai High crude. The three state refiners also accept ONGC's demand that the "net worth (of the crude) will be on four cut method."