ET reported that sources with direct knowledge of the matter said that Indian Oil Corp has barred Swiss based Vitol, the world's largest oil trading firm, from participating in its tenders and other state run refiners may follow suit.

Sources said that IOC, the country's biggest refiner, has put the Vitol Group companies, Vitol SA Geneva and Vitol Asia Pte Ltd Singapore, on a holiday list from September 3 as the trader withdrew and modified a binding offer made in a crude import tender.

Officials at Indian Oil declined to comment. Vitol, responding to an email seeking comment, said it never comments on commercial relationships.

IOC has informed other state run refiners about the move and has asked them to explore the possibility of initiating similar action. Indian Oil was at one point the country's sole crude importer and used to buy oil on behalf of other companies. State-run firms still work closely on matters such as international trade and retail fuel prices.

Other state refiners would consult the oil ministry on suspending Vitol from participating in their tenders.

Earlier, India's second biggest state run refiner Bharat Petroleum Corp had barred Glencore from participating in its tender but later lift the ban as the trader agreed to pay half the damages to the Indian firm.

(Sourced from ET)