Union Cabinet gives nod to Revised Policy on crude oil import for oil PSUs

The Union Cabinet has given its approval to replace the existing policy on crude oil import by Oil PSUs and vest the oil PSUs with the power to evolve their own policies.
This decision will provide operational efficiency, commercial flexibility and dynamic policy for crude oil procurement for PSUs based on their commercial requirements that will eventually benefiting the consumers.
However their policies will be consistent with CVC guidelines and approved by the respective Boards. It will enable Oil PSUs to adopt the most effective procurement practices for import of crude oil with the changing times and changing geo-political environment.
Background

• Under the existing policy for import of crude oil which was approved by the Union Cabinet in 1979, oil PSUs traditionally were allowed to source crude only from national companies of oil-producing nations.
• This policy was amended in 2001 by the Union Government and permitted oil PSUs to buy oil from top 10 foreign firms.
• As it only allowed the spot or current market procurement practices for import of crude oil, it resulted in certain limitations and restrictions that hindered the potential sources and most effective methods of procurement with the changing times and geo-political environment.

Month: Current Affairs - April, 2016