The Parliamentary standing committee on petroleum and natural gas suggested the formation of a joint venture firm by all the state-run refiners who import crude oil from abroad.
The proposed joint venture firm, that would be promoted by all the interested state-run refiners, must be entrusted with the work of importing of crude oil required for them in line with their refining specification, the committee said.
It suggested this option instead of the current practice of the state-run firms importing crude oil separately. The panel feels that collective import of crude oil could ensure that we produce oil at a competitive rate and in an efficient manner.
It may be noted that Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL), Hindustan Petroleum Corp (HPCL) and Mangalore Refinery (MRPL) import crude oil separately. Their combined imports total 120 million tonne in 2012-13.
The committee submitted its report in Parliament recently. The repor noted that private refiners like Reliance Industries are able to procure crude oil at lower prices.
The committee desire that this (joint venture) company may be given enough flexibility as enjoyed by private sector refineries to carry out their operations including price negotiation, hiring of ships and negotiate better terms on freight etc which will help PSUs save lot of work relating to imports, the report said.
Till July 1998, the entire requirement of crude oil was canalised through IOC. Thereafter the import was decanalised and private refineries were allowed to procure their own requirement.
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