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Government Considering Reform Proposal For Domestically Produced Oil

The proposal is expected to ease the regulation for domestically produced oil and if accepted, it will allow crude oil producing companies to sell crude oil in the open market

Photo Credit : Bloomberg

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The Cabinet Committee on Economic Affairs (CCEA) informed through a video conference on Wednesday that it is likely to consider the proposal to reform domestically produced crude oil.

The proposal is expected to ease the regulation for domestically produced oil and if accepted, it will allow crude oil producing companies to sell crude oil in the open market.

The Centre at present decides which state-run refinery gets how much crude from each producer. The price is then worked out on a traditional formula with Brent as a marker.

The move is significant as the government wants to give impetus to domestic production of crude oil in the country.

India’s domestic crude oil production has been on a consistent decline since FY15. In FY22, the country produced only 28.4 million tonnes (MT) of crude oil, which is the lowest in nearly three decades, since FY94, as per reports.

Ageing fields in the country where natural production decline has set in, has contributed to the decline in overall production of domestic crude oil. 


 


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crude oil