Public sector oil companies will now have greater independence with regard to import of crude oil after the Union Cabinet gave its nod to empower such firms for developing their own policy for sourcing the hydrocarbon.

An official statement said that the oil sector PSUs will be empowered to evolve their own policies for import of crude oil consistent with the guidelines of the Central Vigilance Commission and get them approved by their respective board of directors.

Such freedom could enable companies to source more from the spot market if they choose to do so and also they could choose to import more through long term contracts. Basically, oil PSUs will have more operational and commercial flexibility.

“The crude import policy needs to be modified to bring it in tune with current needs. The current market practices for purchase of crude oil on spot basis also need to be adopted to compete effectively in the market. The current policy has certain limitations and restrictions in this regard which has now been done away with,” said Ravi Shankar Prasad, Minister for Communications and Information Technology, after the Cabinet meeting.

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