Govt plans to stop allocating local crude to oil refineries

New Delhi: The government is planning to abandon the current practice of allocating locally-produced crude oil to various refineries, which would help develop a free market for domestic crude, enable producers to realise better prices, and end some of the current supply logistics problems, according to people familiar with the matter.

The Cabinet is likely to shortly consider the oil ministry’s proposal for freeing up the sale of domestic crude oil. The proposal has come about after years of lobbying by producers, mainly from the private sector, which saw the state allocation of crude as an unnecessary control on producers.