Industry welcomes deregulation of crude oil
After this decision, ONGC can auction 13-14 million tonnes of crude oil produced from its Mumbai High Field to any refining company including Reliance Industries Limited and Rosneft-backed Naira Energy.
Industry has approved the Union Cabinet to allow domestic oil producers to sell oil to any Indian refinery.CabinetWelcoming the decision, has said that it will help in increasing government revenue and attract investment in oil exploration and production. The Union Cabinet on Wednesday decided to allow oil producing companies like ONGC and Vedanta to sell locally produced crude oil to any Indian refinery. Oil producers in contracts for oil fields awarded after 1999 Oil ,Crude) Freedom to sell was given but the government itself used to decide buyers for crude produced from old oil fields like ONGC’s Mumbai High and Vedanta’s Rawa. But with this decision, this bond has now been removed.
What is the opinion of the industry
Terming the decision as “historic”, Vedanta Chairman Anil Agarwal said that India has huge hydrocarbon reserves and can produce oil and gas at the lowest cost. This will help in rationalization of taxes and duties and boost domestic production in line with global standards. He said that this move will attract many national and international companies to explore and produce in India and encourage international investment in this area. Aggarwal said that we are committed to invest $4 billion in Vedanta Cairn Oil & Gas and contribute 50 per cent to India’s domestic hydrocarbon production. However, he did not specify any time frame for this. At the same time, a top official of state-owned oil company Oil and Natural Gas Corporation (ONGC) also welcomed the decision, saying that there is no point for the government to decide on buyers when pricing has already been deregulated. went.
Companies got freedom in oil sales
After this decision, ONGC can auction 13-14 million tonnes of crude oil produced from its Mumbai High Field to any refining company including Reliance Industries Limited and Rosneft-backed Naira Energy. ONGC currently has to sell its oil to the public sector Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL). It could not even sell oil to its Mangalore refinery. However, ONGC may conduct open auction of crude oil produced from other places like Gujarat, Assam and East Coast. Public sector Oil India Limited (OIL) can also do the same. Vedanta Cairn Oil and Gas will get freedom to sell oil from its Rawa field located on the east coast. At present, the company sells the oil extracted from Rava only to HPCL. However, the firm already sells oil from its core Rajasthan fields to both public and private refineries.