Central Govt. Announces Deregulation Of Sale Of Domestically-Produced Crude Oil
The Central government on Wednesday announced deregulation of sale of domestically-produced crude oil, and giving autonomy to the companies to sell crude oil to whomever they want.
New Delhi: The Central government on Wednesday announced deregulation of sale of domestically-produced crude oil, and giving autonomy to the companies to sell crude oil to whomever they want. The announcement was made by Information and Broadcasting minister Anurag Thakur after the move was approved by the Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi.
Thakur announced the cabinet committee has approved 'Deregulation of Sale of Domestically Produced Crude Oil', a move that will ensure marketing freedom for all Exploration and Production (E&P) operators.
During a media briefing here in New Delhi, the union minister said, "The condition in the Production Sharing Contracts (PSCs) to sell crude oil to Government or its Nominee or Government Companies shall accordingly be waived off. All E&P companies will now be free to sell crude oil from their fields in the domestic market. Government revenues like Royalty, cess, etc. will continue to be calculated on a uniform basis across all Contracts."
He also stated that exports of the crude oil by the companies will not be permissible. From October 1st onwards, conditions in Production Sharing Contracts (PSC) to sell crude oil to the government, its nominee or government companies will be waived off, thus giving freedom to the firms to sell crude oil to private players.
The union minister has said that the said decision will further spur economic activities, incentivize making investments in the upstream oil and gas sector. He believes that the policies relating to production, infrastructure and marketing of oil and gas have been made more transparent with a focus on ease of doing business and facilitating more operational flexibility to operators or industry.
India heavily depends on the import of crude oil, as it is the third largest oil importer and consumers of oil. At present, India fulfills about 85 percent of its crude oil needs from overseas since the oil output from the domestic market has been low for years. The government currently allocates crude produced by state-run ONGC and Oil India to various refiners.