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India’s state-run oil firms are scrambling to comply with a recent government order to go local while hiring ships to haul crude and petroleum products of value less than ₹200 crore as part of the revised Make in India policy on procuring services.
The government move would be a big bonanza for local fleet owners such as state-run Shipping Corporation of India Ltd (SCI), The Great Eastern Shipping Co Ltd, Seven Islands Shipping Ltd and Essar Shipping Ltd, but its immediate implementation could pose a problem due to shortage of Indian ships to meet the requirements, government officials said.
“The oil PSUs are working out the modalities for implementing the policy. But, we don’t know whether it would be possible to implement this policy immediately in shipping. Because, we would be struggling for vessels; we don’t have that many Indian ships to meet the requirements,” said an executive with one of the state-owned refiners based in Mumbai.
“Given this situation, we are looking at how to go about this,” he added.
Shipping Ministry officials said that the policy would be used when oil PSUs hire ships on spot contracts, which are all less than ₹200 crore. In comparison, long-term time charter contracts are typically valued at more than ₹200 crore.