Reliance Industries Ltd. has resumed purchasing discounted Russian crude oil, marking its return to the market after a temporary pause following US sanctions on major Russian oil producers. The company is sourcing barrels from non-sanctioned suppliers and routing them to its refinery operations in Gujarat.

Refinery Operations and Market Impact

The Indian oil giant has contracted Aframax tankers from RusExport and is directing flows to its 660,000-barrel-a-day plant in Jamnagar that supplies domestic customers. This resumption is likely to reduce the decline in India's overall purchases of Russian oil, which officials have indicated could drop significantly this month.

Sanctions Timeline and Compliance

Reliance had paused Russian oil purchases after the US sanctioned Rosneft PJSC and Lukoil PJSC on October 22, giving refiners a month to wind down transactions with these producers. The company was granted an additional month to receive vessels contracted before the sanctions date, with the final cargo under that waiver arriving in India on December 17, before the exemption expired.

Strategic Shift in Supply Sources

The oil market has been closely monitoring Russian exports after Washington imposed sanctions on Moscow's two top producers in October to curb funding for the war in Ukraine. This has led Indian refiners to seek exports from non-sanctioned Russian entities as well as explore costlier alternatives from other regions, though Russian flows were still expected to drop substantially.

Impact on India's Russian Oil Imports

Indian officials estimated that the nation's oil imports from Russia would decline dramatically to approximately 800,000 barrels per day from an average of 1.9 million barrels per day in November as refineries stopped taking the crude. Reliance's return to purchasing Russian oil through compliant channels may help moderate this steep decline.

Since the sanctions took effect, all Russian imports to Reliance have been directed to its domestic sales-focused refinery, while the export-oriented unit last received a Russian crude shipment on November 20. The company continues to operate both facilities at its Jamnagar complex, adapting its supply chain to navigate the evolving sanctions landscape.

Reliance Industries has received a penalty order from tax authorities imposing a fine of ₹1.11 crore under the Goods and Services Tax (GST) framework. The company disclosed this development through a regulatory filing under Regulation 30 of SEBI's Listing Obligations and Disclosure Requirements Regulations, 2015.

Penalty Details and Allegations

The penalty order was issued by the Deputy Commissioner of State Tax, Jamnagar. The order imposes the penalty under Section 73 of the Central Goods and Services Tax Act, 2017, the Gujarat Goods and Services Tax Act, 2017, and applicable provisions of the Integrated Goods and Services Act, 2017.

The order alleges incorrect availment of input tax credit by the company. Input tax credit is a mechanism under GST that allows businesses to claim credit for taxes paid on inputs used in the production of goods or services.

Company's Response and Impact

Reliance Industries has stated its intention to file an appeal against the penalty order, indicating the company disputes the allegations.

Regarding the financial and operational impact, the company has clarified that the financial impact is limited to the extent of the penalty levied. Importantly, Reliance Industries has confirmed that there is no impact on operations or other activities due to this order.

Regulatory Compliance

The disclosure was made in compliance with securities regulations, with notifications sent to both BSE Limited and National Stock Exchange of India Limited. The company also informed international exchanges including Luxembourg Stock Exchange and Singapore Exchange Limited, reflecting its global listing presence.

This development represents a regulatory matter that Reliance Industries is addressing through appropriate legal channels while maintaining normal business operations.