New Delhi: relaxation Domestic crude oil appears to have tipped the balance in favor producers As if the green shoots of the free market are emerging. In term deals signed after gaining marketing independence, state-run manufacturers ONGC placing an order premium price Above brent For Mumbai’s offshore oil, despite efforts by public sector buyers to drive down prices by taking advantage of discounts on Russian supplies.
Bharat Petroleum and Hindustan Petroleum recently signed a term deal with ONGC for 4.5 million tonnes mumbai crude At the benchmark price plus a 1% premium to Brent. Therefore, at the prevailing Brent price of $80 per barrel, ONGC will earn an additional income of $0.8, people in the know said.
ONGC opted for a term deal after facing demands for relaxation in introducing quarterly auctions to sell oil after deregulation. The first auction in November last year attracted a premium of $0.5 over the average monthly price of Brent.
This led to fears that refiners could come together and drive down prices at auctions. IndianOil also took advantage of its leading position to get deep discounts. Facing the arguments, the oil ministry approved the term deal route.
As TOI first reported, the government in June last year had scrapped the rule under which oil from blocks awarded before 1999 must be sold without auction to government-nominated customers, mostly state refiners. Due to the old rule, producers like ONGC and Oil India were not able to get the best market price.
ONGC produces 13-14 million tonnes of crude oil per year from its fields in the Arabian Sea off the Mumbai coast. Apart from BPCL and HPCL, a deal has also been signed with its subsidiary MRPL for small quantities.
Bharat Petroleum and Hindustan Petroleum recently signed a term deal with ONGC for 4.5 million tonnes mumbai crude At the benchmark price plus a 1% premium to Brent. Therefore, at the prevailing Brent price of $80 per barrel, ONGC will earn an additional income of $0.8, people in the know said.
ONGC opted for a term deal after facing demands for relaxation in introducing quarterly auctions to sell oil after deregulation. The first auction in November last year attracted a premium of $0.5 over the average monthly price of Brent.
This led to fears that refiners could come together and drive down prices at auctions. IndianOil also took advantage of its leading position to get deep discounts. Facing the arguments, the oil ministry approved the term deal route.
As TOI first reported, the government in June last year had scrapped the rule under which oil from blocks awarded before 1999 must be sold without auction to government-nominated customers, mostly state refiners. Due to the old rule, producers like ONGC and Oil India were not able to get the best market price.
ONGC produces 13-14 million tonnes of crude oil per year from its fields in the Arabian Sea off the Mumbai coast. Apart from BPCL and HPCL, a deal has also been signed with its subsidiary MRPL for small quantities.
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