The cabinet committee on Wednesday approved the deregulation of the sale of domestically produced crude oil.

The decision was made with an aim to further spur economic activities, and incentivize making investments in the upstream oil and gas sector.

"The government has decided to cease allocation of crude oil and condensate w.e.f. 01.10.2022. This will ensure marketing freedom for all Exploration and Production (E&P) operators. The condition in the Production Sharing Contracts (PSCs) to sell crude oil to the Government or its Nominee or Government Companies shall accordingly be waived off," read an official statement.

All E&P companies will now be free to sell crude oil from their fields in the domestic market. Government revenues like Royalty, cess, etc. will continue to be calculated on a uniform basis across all Contracts. As earlier, exports will not be permissible.

"The policies relating to production, infrastructure and marketing of oil and gas have been made more transparent with a focus on ease of doing business and facilitating more operational flexibility to operators/industry," added the statement.