'Use only Indian oil tankers', says shipping ministry

Vol 18, PW 7 (20 Nov 14) People & Policy

Copy Japan and everything will be just fine! That’s the message from the shipping ministry as it demands protection for India’s beleaguered shipyards.

Within the next two months shipping ministry officials are confident of reaching agreement with IndianOil, Bharat Petroleum, Hindustan Petroleum and ONGC-subsidiary MRPL to hire only Indian-flagged tankers for their long-term crude import contracts. The goal: to save huge outflows of foreign exchange.

“Several meetings have been held,” confirms a ministry source. “We hope to finalise this within the next two months.

” He adds the main argument state-owned oil companies have against Indian-flagged tankers is that as commercial, autonomous organisations, they should be free to choose the lowest rates, Indian or otherwise. “Indian shipowners can match the lowest market rates,” he adds, “provided they get firm long-term contracts.

” On September 24 the shipping ministry wrote to the oil, steel and fertiliser ministries asking them to look into hiring Indian-flagged tankers on a “priority basis” in line with the PMO’s action plans. This follows an August 25 meeting chaired by shipping secretary Vishwapati Trivedi with state-owned oil companies, the oil, steel and fertiliser ministries.

At this meeting, the shipping ministry said India should emulate Japan’s ‘cabotage’ system for coastal shipping which ensures that only Japanese ships can carry cargoes between Japanese ports.