MEA rejects EU sanctions on Russia-owned Gujarat refinery

Rejecting European Union (EU) sanctions against a refinery in Gujarat, India on Friday said it did not subscribe to unilateral measures while reminding the EU to eschew using double standards on the matter.

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Ministry of External Affairs (MEA) spokesperson Randhir said, "India does not subscribe to any unilateral sanction measures. The Government of India considers the provision of energy security a responsibility of paramount importance to meet the basic needs of its citizens... We stress that there should be no double standards."

Sources said the "double standards" remark was made as EU's member-countries had plans to continue importing Russian gas till 2027.

On Friday morning, the EU imposed sanctions on an oil refinery being operated in India with the support of Russian energy giant Rosneft. The move was part of the EU's fresh punitive measures against Moscow to pressure it on ending its war with Ukraine.

EU foreign policy chief Kaja Kallas posted on X: "For the first time, we are designating a flag registry and the biggest Rosneft refinery in India.”

Rosneft owns a 49.13 per cent stake in Nayara Energy Ltd, formerly Essar Oil Ltd. Nayara owns and operates an oil refinery at Vadinar in Gujarat, as also over 6,750 petrol pumps.

A news agency, PTI, reported that an investment consortium, SPV Kesani Enterprises Company, holds 49.13 per cent stake in Nayara. Kesani is owned by Russia's United Capital Partners and Hara Capital Sarl, a wholly owned subsidiary of Mareterra Group Holding.

The EU sanctions mean Nayara cannot export petrol and diesel to European countries. Kallas said, “We are standing firm. The EU just approved one of its strongest sanctions package against Russia to date… We are cutting the Kremlin's war budget further, going after 105 more shadow-fleet ships, their enablers, and limiting Russian banks' access to funding."

The EU also lowered the price cap for buying Russian crude oil. However, Kallas did not specify the new price cap.

The lowered oil price cap means Russia will be forced to sell its crude at reduced rates to buyers like India. As the second-largest purchaser of Russian oil, India stands to benefit from this move. Russian crude currently accounts for nearly 42 per cent of India's total oil imports. The price of $60 per barrel on Russian oil was fixed in December 2022 by the G7 nations.

Europe imports fuels like diesel and petrol from India. Indian refiners buy large amounts of Russian crude, which is refined to fuels like petrol and diesel and exported to the EU.