Centre gives marketing freedom to domestic oil producers

This essentially means producers will be free to sell oil from their fields in the domestic market

The Union Cabinet Wednesday approved deregulation of the sale of domestically-produced crude oil, a move that will spur oil production domestically and help companies like Oil India and ONGC get better realisations for their crude.

Until now, the Centre used to decide which state-run refinery gets how much crude from each producer.

"The decision will ensure marketing freedom for all companies engaged in oil exploration and/or production. Exploration and production companies are free to sell crude oil from their fields in Indian market and exports shall continue to be prohibited,"Cabinet minister Anurag Thakur said briefing reporters.

This decision will further spur economic activities, incentivise investments in upstream oil and gas sector and will build on a series of targeted transformative reforms rolled out since 2014.

The policies relating to production, infrastructure and marketing of oil and gas have been made more transparent with a focus on ease of doing business and facilitating more operational flexibility to operators/industry, said the Cabinet resolution after Prime Minister Narendra Modi chaired the meeting on Cabinet Committee on Economic Affairs.

India is the world’s third largest consumer of crude oil and ships more than 85 per cent of its requirements from abroad.