1. Oil Ministry local content strategy to be incremental

Oil Ministry local content strategy to be incremental

The government will be adopting an incremental methodology for implementing its local content preference policy for state-run firms operating under the petroleum ministry.

By: | New Delhi | Published: April 14, 2017 5:52 AM
Under this method, the portion of local content used in goods and services will increase over the years and will vary across the value chain. (Reuters)

The government will be adopting an incremental methodology for implementing its local content preference policy for state-run firms operating under the petroleum ministry. Under this method, the portion of local content used in goods and services will increase over the years and will vary across the value chain. For instance, onshore drilling or workover rigs will require 50% local content in the first year, 60% in next two years and 70% in the last two years. Similarly, for premium bids and specialised drilling and completion services, the required local content has been pegged at 10% for the first year, 15% in next two years and 20% in the fourth and fifth years.

Addressing a press conference in New Delhi on Thursday, Ajay Sawhney, additional secretary in the petroleum ministry, said the government has prepared a different table for various activities both in upstream and downstream. “It is a gentle persuasion to suppliers to create more domestic activity,” he added.

The Cabinet Committee on Economic Affairs on Wednesday approved a policy under which manufacturers or service providers who meet the local content targets and whose quoted price is within 10% of lowest valid price bid, would be eligible for 10% purchase preference for a stipulated portion of the purchase order, on matching such price. The move is in line with the NDA government’s flagship ‘Make in India’ programme. “We are trying to balance competition (from imported content) while pushing local content,” said petroleum secretary KD Tripathi.

According to Sunjay Sudhir, joint secretary for international cooperation at the petroleum ministry, IndianOil is looking to partner with Nepal Oil Corporation to enter the retail market along with extending the Raxaul-Amlekhgunj oil pipeline to Chitwan on the Nepal side and Motihari on the Indian side. Once the pipeline is ready, a major portion of the 1 MT petroleum products transported to the Himalayan nation from India will be through this pipeline and the two parallel pipelines — LPG and natural gas — being built currently.

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