The petroleum ministry has asked state-owned oil companies — Indian Oil, Bharat Petroleum and Hindustan Petroleum — to strictly adhere to the Reserve Bank of India directive that they purchase half of their dollar requirements from a single public sector bank.
This directive was in the wake of the volatility in the rupee against the US dollar. The central bank feels that if the oil firms seek a single quote for their dollar requirements, rather than enquire with several banks, would help check rupee volatility.
“The RBI letter has come to the government. We are in correspondence with the oil companies to make sure they comply with the directive,” petroleum secretary GC Chaturvedi said on Friday.
The oil PSUs can source the rest of their dollar requirements through competitive bids from public and private banks.
{{/usCountry}}The oil PSUs can source the rest of their dollar requirements through competitive bids from public and private banks.
{{/usCountry}}Private sector Reliance Industries and Essar Oil, who between them import over 40% of crude oil shipped to India, will continue to buy dollars as per their company policies.
“At present, oil companies seek dollar quotes from multiple banks, giving an exaggerated impression of their demand, strengthening the dollar,” Chaturvedi said.