New Delhi: Government plans to form a giant national oil company by combining other state-owned firms, finance minister Arun Jaitley said on Wednesday to expand its foreign presence to meet growing domestic fuel demand.
Struggling to lift its local oil production - imports about 80 percent of its oil needs - Prime Minister Narendra Modi in 2015 set the goal of cutting this import dependence to 67% by 2020.
A dozen state-run oil and gas companies - including Indian Oil Corp, Oil and Natural Gas Corp, Hindustan Petroleum Corp and others - do not have the financial power to rival global oil majors in bids for overseas exploration and production assets.
Combining them "will give them capacity to bear higher risks, avail economies of scale, take higher investment decisions and create more value for shareholders," Jaitley said.
To lift the share of natural gas in overall energy mix, Jaitley also announced a cut to the import tax for liquefied natural gas (LNG) to 2.5% from 5%.
He also proposed setting up strategic oil storage facilities at two new locations, one in the eastern state of Odisha and another in the northwestern state of Rajasthan.
India is hedging against energy security risks by building emergency storage sites in underground caverns in southern India to hold 36.87 million barrels of crude or about 10 days of its average daily oil demand in 2016.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed)