ONGC seeks to sell offshore crude at market rate

Oil and Natural Gas Corporation has sought permission from the government to end the discount it offers on crude oil from its offshore assets to domestic state-run refiners, chairman and managing director Subir Raha said on Friday.

"We have requested the government to discontinue the ongoing system of the oil ministry allocating ONGC's offshore oil to other state-owned refiners," Raha told reporters on the sidelines of an industry conference.

Of ONGC's 17-million-tonne annual crude output from various offshore fields, it supplies 13 million tonne to Indian Oil and its subsidiaries, Hindustan Petroleum Corporation Ltd. and Bharat Petroleum Corporation.

Raha said ONGC sells crude to state run refiners at $2-5 a barrel less than the landed cost of bonny light crude. Meanwhile, ONGC subsidiary Mangalore Refinery and Petrochemicals Ltd. imports crude for processing. Raha said the government had come out with a notification on March 31, 2002, to discontinue the allocation system, "but it has not been implemented thus far".