In a landmark decision, Indian government has announced the change of draconian oil import policies. Formed way back in 1979 and last amended in 2001, the policy had several complicated restrictions limiting the source and method of buying crude oil. This move comes weeks after India saw the Hydrocarbon Exploration policy which will allow a much needed investment boost for the sector.
In the 2001 amendment the government had granted some concessions to PSU Navaratna and Maharatna companies. Till now companies could buy crude from only 10 MNCs. Due to this mandate, state owned companies were losing out on the chance to buy cheaper crude. In fact they were expected to launch the tender two months before the procurement of oil. The new policy shall allow them more flexibility and freedom to buy as per their own plans and needs and the purchase can be on-spot basis as well.
This places state owned oil cos like Hindustan Petroleum, Indian Oil and Bharat Petroleum at par with private entities like Reliance Industries which did not come under the government’s rule. The catch though is that they can form their own policies as long as they comply with the Central Vigilance Committee.
On a similar topic, the country recently saw prices of petrol increased twice in less than two months. In fact prices have been raised by Rs 5.16 since March despite the country procuring crude in the range of 35-40 dollars a barrel.