Oil PSUs’ charter plans on a cruise

NEW DELHI: The stage is set for public sector oil companies to charter ships for direct oil imports instead of going through Transchart, an arm of Ministry of Shipping. The success of Indian Oil Corporation (IOC) in making its own chartering arrangements has paved way for other oil PSUs to follow suit.

The government is considering a proposal from oil marketing companies (OMCs) for allowing them to make their own chartering arrangements in line with IOC, a source in the government said. It is understood that a meeting between OMCs and government in this regard was held last week.

According to government sources, “IOC seems to have improved on all parameters (with regard to its own ship chartering arrangements).” On April 8, ‘05, the cabinet had allowed IOC to charter ships for oil imports directly and had said that a similar autonomy could be ac-corded to other oil PSUs only after reviewing the IOC experience.

“HPCL, BPCL and MRPL would continue to depend upon Tran-schart/SCI for meeting their chartering requirements for the time be-ing. Their case, for hiring charter ships, would be reviewed after one year based on the experience of IOC,” the cabinet had said on April 8, ‘05.

It is expected that while IOC would be allowed to continue the exist-ing chartering arrangement, other oil PSUs may also gain autonomy in this regard. According to a preliminary report, IOC could achieve freight reduction of approximately Rs 60 crore in voyage fixtures by making its own chartering arrangements between June ‘05 and May ‘06. As per the cabinet direction, IOC, which commenced direct ship chartering from June 15, ‘05, submitted details of direct ship chartering to the government after the completion of one year in June ‘06.

IOC has almost doubled the percentage of Indian tonnage in ‘05-’06 as compared with the previous year even as it followed all regulations relating to hiring of ships. IOC gave the first right of refusal to Indian flag vessels, provided their offers were technically suitable.