The necessity for government-controlled oil companies to individually request exceptions to the local steel sourcing mandate has recently been brought into discussion. This regulatory requirement, regulated by the Ministry of Petroleum and various other governmental organizations, significantly impacts the operational capacities and logistics of these oil companies. Before diving deeper into this issue, it is imperative to understand its background and its potential implications.
1. Government-controlled oil companies are required to individually request exceptions to the local steel sourcing mandate regulated by the Ministry of Petroleum and other governmental organizations.
2. This regulation potentially impacts the operational capacities and logistics of these oil companies.
3. The Ministry of Petroleum and Natural Gas imposed this mandate to stimulate growth in the local steel industry.
4. All government-controlled oil companies have to apply on a case-by-case basis for exemptions to this decision.
5. The mandate, part of a broader vision of enhancing domestic manufacturing capabilities, poses a complex challenge for oil companies as meeting demand exclusively through local steel sourcing is proving difficult.
In India, for example, up to 70% of steel used by government-controlled oil companies is required to be sourced locally, as per the Public Procurement (Preference to Make in India) Order 2017.
The Ministry of Petroleum and Natural Gas has imposed this mandate with the aim of driving growth in the local steel industry. Every government-controlled oil company currently has to apply on a case-by-case basis for exemptions to this rule. This new approach to buying local steel has been heavily influenced by the broader vision of enhancing the country's domestic manufacturing capabilities. However, fulfilling the demand exclusively through local steel sourcing is proving to be a complex challenge for these oil companies.