In a bid to improve operational efficiency, Union Cabinet on 6 April 2016 allowed public sector oil companies to have their own independent crude import policy based on their commercial requirements.
The approval was given during a cabinet meet chaired by Prime Minister Narendra Modi.
The decision will 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 will lead to a more efficient, flexible and dynamic policy for crude procurement, eventually benefiting consumers.
State-owned firms like Indian Oil Corporation (IOC) have traditionally been allowed to source crude only from national companies of oil producing countries. The existing policy was approved by the Cabinet in the year 1979.
However, it was long felt that the list of companies from where the PSUs can buy crude oil on term contracts needs to be expanded to include global oil giants.
With this in view, in 2001, the Union Cabinet delegated substantial powers to Navaratna and Maharatna companies among PSUs. Such companies are given high degree of autonomy in various operational, financial and investment matters.
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