Vedanta Cairn Oil & Gas bats for import parity pricing on crude oil

07 Mar 2022 CW Team

It also pushed for a rethink of the Enhanced Oil Recovery (EoR) policy, calling for levies to be reduced from 70% to 40%.

Domestic crude sales to refineries are subject to central sales tax and Value- added tax (VAT), whereas imported crude is not. Domestic crude will be 3% more expensive as a result of this. This additional cost can not be passed on to customers because import parity is not in place. This cost is currently being borne by domestic producers, and it is being added to the cost of sales. The central sales tax (CST) Act was amended in February 2021 by the Union Budget, which removed the benefit of a 2% CST concession against the C-form. The production cost rises as a result.

When asked about the government sops that the company needs to increase production, he asked for a rethink of the EoR and improved oil recovery (IOR) policies. This is because pre-New Exploration Licensing Policy (NELP) blocks are expected to provide the majority of incremental production in the short term. Changes to the shale policy were also suggested by the company to make the industry more viable.

This year, the company plans to begin its shale pilot project, with a potential resource base of around 3 billion barrels. In the case of shale, the industry demanded a 10% increase in profit petroleum, in addition to the percentage of profit petroleum shared with the government under current production-sharing contracts. There were also calls for the Centre's profit petroleum share on unconventional blocks to be capped at 20%.

Image Source

Also read: Vedanta Aluminium business to focus on backward integration in 2023

Due to the Ukraine crisis, international crude oil prices are hovering around $100 per barrel, so Vedanta arm Cairn Oil and Gas batted for import parity pricing on crude oil to bolster domestic production. India's largest private exploration and production company is Cairn Oil and Gas. It also pushed for a rethink of the Enhanced Oil Recovery (EoR) policy, calling for levies to be reduced from 70% to 40%. Domestic crude sales to refineries are subject to central sales tax and Value- added tax (VAT), whereas imported crude is not. Domestic crude will be 3% more expensive as a result of this. This additional cost can not be passed on to customers because import parity is not in place. This cost is currently being borne by domestic producers, and it is being added to the cost of sales. The central sales tax (CST) Act was amended in February 2021 by the Union Budget, which removed the benefit of a 2% CST concession against the C-form. The production cost rises as a result. When asked about the government sops that the company needs to increase production, he asked for a rethink of the EoR and improved oil recovery (IOR) policies. This is because pre-New Exploration Licensing Policy (NELP) blocks are expected to provide the majority of incremental production in the short term. Changes to the shale policy were also suggested by the company to make the industry more viable. This year, the company plans to begin its shale pilot project, with a potential resource base of around 3 billion barrels. In the case of shale, the industry demanded a 10% increase in profit petroleum, in addition to the percentage of profit petroleum shared with the government under current production-sharing contracts. There were also calls for the Centre's profit petroleum share on unconventional blocks to be capped at 20%. Image Source Also read: Vedanta Aluminium business to focus on backward integration in 2023

Infrastructure Energy

19 Sep 2025

J&K CM Rules Out Power Privatisation, Focuses on Sector Reform

Jammu and Kashmir Chief Minister Omar Abdullah has dismissed speculation regarding privatisation of electricity in the Union Territory, emphasising that his priority is to strengthen and reform the power sector.“We are not discussing privatisation. By reducing losses, improving billing efficiency, and enhancing revenue, there will be no need for it. My vision is to strengthen and reform the power sector in J&K,” Abdullah stated.He addressed the gathering at the 58th Engineers’ Day at SKICC on Monday evening, an event honouring Bharat Ratna Sir M Visvesvaraya for his pioneering contri..

Infrastructure Urban

19 Sep 2025

Mumbai’s Sassoon Dock to Get Tech-Driven Modernisation with Finland

The Maharashtra government, in collaboration with Finland, will modernise Mumbai’s historic Sassoon Dock using advanced technology, state minister Nitesh Rane announced on Wednesday.Rane met a delegation of Finnish officials and representatives of Finnish companies at the dock to discuss strategic plans for upgrading the facility in south Mumbai, according to an official statement.Built in the 19th century, Sassoon Dock is one of Mumbai’s oldest and busiest fishing harbours. Operations currently exceed its original capacity, raising concerns over hygiene, odour, fish handling standards, an..

Infrastructure Energy

19 Sep 2025

Agarwal Industrial Wins Rs 3.3 Billion IOCL Bitumen Tender

Agarwal Industrial Corporation rose 3.84 per cent to Rs 945.65 after announcing it had secured a prestigious tender from Indian Oil Corporation (IOCL) worth Rs 3.3 billion.In a regulatory filing during market hours, the company confirmed it had won the tender to supply Bulk Bitumen (VG-30 and VG-40 grades) to IOCL’s Kakinada locations.The firm quantity under the award totals around 60,500 tonnes across 11 parcels, while the optional quantity is approximately 33,000 tonnes across six parcels. This brings the total awarded quantity to roughly 93,500 tonnes. At current market prices, the firm o..