HC reserves verdict on Cairn India's plea for crude export

The Delhi High Court today reserved its verdict on a plea filed by UK-based Vedanta group company Cairn India Ltd seeking permission to export excess crude from its Barmer oil field in Rajasthan.
Justice Manmohan concluded hearing arguments on the plea and directed the firm and the Centre to file short submissions on the issue relating to the export-import policy of the country.
"Arguments heard. Judgement reserved," the court said.
During the arguments, Additional Solicitor General (ASG) Tushar Mehta, appearing for the Ministry of Petroleum and Natural Gas, said that Cairn India cannot be permitted to export crude as "no unrefined petroleum product is allowed to be exported".

"Since long, the policy of Government of India is the same that till the country attains self-sufficiency, not even a drop of crude can be permitted to be exported. It is not their (Cairn India) case that we are discriminating with them. No one in the country is allowed to export crude," he said.
"It is not the policy of the government of the day but it is the policy of the country since decades," he said.

The counsel, appearing for Cairn India, countered the ASG's submissions and said that the export policy gives it the right to export.
"There is no policy which does not permit export of crude," the counsel said, adding that it right to export was "arbitrarily" curtailed.

He argued that no policy has been placed by the ministry before the court which says that crude cannot be exported.
The government had earlier argued that export of the country's domestic crude oil cannot be allowed as it would be detrimental to national interest considering the fact that nearly 85 per cent of required crude was imported.
Cairn India's counsel had said that they are ready to sell crude within India provided they get the benchmark price.
Under the contract, the government or its nominee can pick up the company's share of crude and what is not picked up, could be sold to private players or exported, Cairn has said.

However, after the crude is sold, the government gets 70 per cent of the profits, the company has contended.
It has claimed that as a result of selling excess crude to private domestic companies like Reliance and Essar, at rates lower than international prices, the government was losing about Rs 4.5 crore per day.
Cairn had claimed that it had made several representations to the Directorate General of Foreign Trade for permission to export the crude, but did not get any response.
Prior to this, it had written to Indian Oil Corporation Limited (IOCL) to "canalise" export of the crude, but got no response from it as well. IOCL is the canalising agent for the export of crude.

Canalising agents are those through which a product can be imported or exported by companies which do not have permission to do so directly.