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The Union Cabinet on Wednesday approved the domestic purchase preference policy for PSU oil companies. This will allow recognised domestic service or product providers to offer a higher bid and still bag a contract.
An official statement said, “Manufacturers/service providers whose quoted price is within 10 per cent of the lowest valid price bid, would be eligible for purchase preference for a stipulated portion of the purchase order, on matching such price.”
The preference policy will be applicable for five years. A steering committee will oversee implementation, carry out an annual review and recommend a year-to-year continuation. The purchase preference will be linked to local content. Targets of local content (LC) will be stipulated for certain oil and gas business activities, an official statement added.
The Cabinet also approved setting up of an Indian Institute of Petroleum and Energy at Visakhapatnam with a capital expenditure of ₹655.46 crore.
With regards to international cooperation, the Cabinet approved the signing of a Framework of Understanding between India and Bangladesh on Cooperation in the Hydrocarbon Sector. The pact is non-binding in nature and will be applicable for 5 years. An MoU for implementation of grid interconnections for the trade in electricity in the BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) region also got the Cabinet’s nod.
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