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

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