The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharamendra Pradhan informed the Lok Sabha in a written reply that the price preference policy was formulated by the Government in May 1984 to encourage the domestic bidders to secure business against International Competitive Bidding (ICB) Tenders being floated by ONGC and OIL for supply of goods and services to them.
However, ONGC and OIL had been requesting Government for discontinuing the price preference policy mainly on the ground that such a policy was leading to restricted competition resulting in higher costs to these companies. The matter was again examined and views of Ministry of Finance was also sought. Ministry of Finance opined that this policy of price preference was not found to be conducive to a competitive and efficient bidding environment. Hence, this Ministry has withdrawn the policy of price preference w.e.f. 1.10.2014.
However, ONGC and OIL had been requesting Government for discontinuing the price preference policy mainly on the ground that such a policy was leading to restricted competition resulting in higher costs to these companies. The matter was again examined and views of Ministry of Finance was also sought. Ministry of Finance opined that this policy of price preference was not found to be conducive to a competitive and efficient bidding environment. Hence, this Ministry has withdrawn the policy of price preference w.e.f. 1.10.2014.
