 "IOC slashes oil import tender time by half")
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.
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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% 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. But operational and financial autonomy in spot purchases help better margins.
"We imported 63% of our crude oil on term contract and the remaining 37% from the spot market in 2015-16. This is compared with 76% term import and 24% spot purchase in 2014-15," the official said.
Reduced time in deciding tenders helps realise better price, he added.
India imports about 80% of its crude oil requirements. Last fiscal, its imports rose 4.6% to 197.43 million tonnes.
As oil prices slid in global markets, the oil ministry last year encouraged state-owned companies to increase their spot purchases to take advantage of market conditions. They stepped up spot purchases which used to be normally 20% of their total requirement to up to 30%.
The existing policy for import of crude oil was approved by the Cabinet in 1979. In 2001, the Cabinet cleared amendments to permit state refiners to buy crude oil from top 10 foreign firms -- Exxon (which has merged with Mobil), Shell, BP, Elf (merged with Total Fina), texaco (merged with Chevron), South Korea's SK, Chevron, USX of USA, Spain's Repsol and Nippon Mitsubishi of Japan.