State-run oil firms now given operational, financial autonomy

New Delhi, April 6 (IANS) The union cabinet on Wednesday permitted national oil companies autonomy in operational, financial and investment matters, not requiring them any more to seek the cabinet approval in this regard.

The permission was given in view of the vast and quick changes in the global oil market for over a year.

"In a far-reaching decision today (Wednesday), the cabinet has decided to vest all PSU (public sector undertaking) oil companies the power to pursue their own policies, autonomy to take spot decisions, and act according to exigencies required by market conditions," Communications Minister Ravi Shankar Prasad told reporters here after the cabinet meeting.

"The only condition to this autonomy is that the decisions should adhere to CVC (Central Vigilance Commission) guidelines and have the approval of the company board of directors," he said.

"The decision is designed to give autonomy to all PSU oil companies in operational, financial and investment matters. They need not first come to the cabinet for approval," the minister added.

Noting that the global oil market has become very flexible in terms of the way prices have fallen over 70 percent through last year, before firming up somewhat, Prasad said that companies now needed to take spot decisions dictated by market conditions.

"Government has been laying down guidelines from time to time, but also allowing flexibility in terms of autonomy to take decisions," he said.