• Domestic crude export not economically justified: Centre to High Court

    With nearly 85 per cent of India’s crude oil requirement being met by imports, it would not be “economically justified” to permit export of the country’s domestic crude production, the Centre has told the Delhi High Court. The submission was made by Additional Solicitor General (ASG) Tushar Mehta, appearing for the Ministry of Petroleum and Natural Gas, while opposing UK-based Vedanta group company Cairn India’s plea for permission to export excess crude from its Barmer oilfield.

    Defending its decision not to allow Cairn to export the crude, the ministry has said an empowered committee of secretaries has gone into the issue and concluded that India’s energy security would be adversely affected by allowing crude oil exports as then “more expensive” and “lighter crude oil” would have to be imported. “India has a total refining capacity of 223 million tons of crude oil. That in the present scenario only 38 million tons of crude oil from domestic production is available for refining in Indian refineries.

    “That the balance (84.9 per cent) crude oil is required to be imported to meet the domestic refinery capacity. Hence, allowing export of domestic production of crude oil is not economically justified,” the ASG told Justice Manmohan. The ASG, assisted by central government standing counsel Anurag Ahluwalia, also told the court that Cairn has “complete freedom to fix the price of crude oil”, that it sells to any domestic refinery, “on arms length basis” as the company has claimed it was forced to sell its share of crude to private players at prices 20 per cent less than global rates.

    With regard to Cairn’s earlier claim that selling its share of crude at lesser price has caused a loss of Rs 14 billion to the government, the ministry told the court that “we do not want to earn profit out of our natural resources” and added that crude oil cannot be exported presently as per its policy of zero per cent export till India attains self sufficiency. The court, thereafter, asked the government to place the policy before it by the next date of hearing on May 18.  Roger Clemens Authentic Jersey

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