Indian Oil Corp (IOC) has cut by more than half the time it takes to finalise a crude oil import tender after the government gave flexibility to state refiners to devise their own crude import policies. IOC, the nation’s largest oil firm, used to take 26 hours to decide on a tender for import of crude oil from spot or current market. In April, after the Cabinet gave state-owned oil refiners freedom to devise their own crude import policies, the time has been shrunk to 12 hours, a senior company official said.
Time for deciding on tenders for export of petroleum products or fuel has been cut to just 9 hours from previous 35 hours. “Earlier, we had a three-member committee comprising two company executives and one senior official of the ministry of petroleum and natural gas to decide on awarding tenders for import of crude oil from the spot market. “Now we have an internal committee which can take decisions quickly,” he said. The government gave flexibility to oil PSUs to help them secure cheaper oil cargoes in an oversupplied market.
The new policy almost puts state-owned refiners on par with private firms like Reliance Industries and Essar Oil. “We now have greater flexibility but still to operate within the framework of (anti-corruption watchdog) CVC guidelines,” the official said. The previous policy limited purchases to a handful of companies, often leading to PSUs missing out on chance to grab cheap, distressed cargoes. Oil PSUs, on an average, import 70-80 per cent of their oil through annual supply deals, also called term contracts. The remaining is bought from the spot or current market through tenders. Term imports on official selling price of the exporter country and there is not much that can be done about it. Tyler Kroft JerseyShare This