In a bid to remove irregularities and enhance revenue, the Union Cabinet approved deregulation of the sale of domestically produced crude oil. Minister Anurag Thakur, in briefing the media on the commitments made by the cabinet, said that the move will ensure marketing freedom for all exploration and production companies.
As per sources, the provision will come into effect from October 1, 2022. Thakur said, “All E&P companies will be free to sell crude oil from their fields to the domestic market.”
Currently, the Centre decides which state-run refinery gets how much crude from each producer. The price is then worked out on a traditional formula with Brent as a marker, in lieu of the global practice of a five-cut or yield of five most used refined products norm. The allocation is done every 6 months.
Further, Thakur said government revenues like royalty, cess will progress to be calculated on a uniform basis across all contracts.