State-owned oil producing companies ONGC and Oil India will now be able to sell crude oil directly to private companies.
State-owned oil producing companies ONGC and Oil India will now be able to sell crude oil directly to private companies. The cabinet of the Central Government has approved the scheme related to this today (June 29). This decision of the government will also help ONGC and Oil India to increase revenue. However, the government has not approved the export. The government allocates the output to all the refineries that state oil producers ONGC and Oil India produce. Both these companies charge the same flat rate for each grade of crude.
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This decision will be effective from October 1
The decision of the Union Cabinet to sell oil directly to private companies to ONGC and Oil India will be effective from October 1. Apart from this, government oil companies have also been given relief from the rules related to the sale of oil. The country’s oil production has remained almost stagnant for the last few years, due to which it has to depend on expensive imports. India is the world’s third largest importer and buys 85 per cent of its crude oil needs from abroad. In the financial year 2021-22, India produced 29.7 million tonnes of oil, which is 2.6 percent less than the financial year 2020-21.
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Shares jump on announcement
After the announcement of the government, the shares of Oil India and ONGC jumped. Shares of Oil India closed today with a jump of 4.8 percent and ONGC shares by about 3.2 percent.