Intro: The Ministry of Petroleum and Natural Gas has taken a number of measures for the benefit of the common man. From January 1, 2015, the cash subsidy on LPG cylinders is being directly credited to the accounts of consumers across the nation. A satisfactory solution to the long-pending issue of gas pricing has been found. There is a commitment towards responsible use and sustainable development of energy resources in the country and to ensure services to all strata of the society in a hassle-free and convenient manner. The ministry is also simplifying processes to make it easier for companies to invest in India’s promising hydrocarbon sector.
The government deregulated diesel prices on October 18, 2014. This move, coupled with decreasing global crude oil and petroleum product prices has benefitted consumers because oil marketing companies have reduced diesel prices by Rs.8.46 per litre (at Delhi).
Deregulation of diesel is expected to result in better service delivery on account of increased competition.
In line with the government’s Digital India campaign, the Ministry of Petroleum & Natural Gas has unveiled a 24×7 web based application at www.mylpg.in, to provide the LPG consumer an integrated solution for all services related to the supply of cooking gas from the comfort of their home. This portal offers several services to LPG consumers across the three public sector Oil Marketing Companies (OMCs) viz. lndian Oil Corporation Limited, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited and their distributors.
In a key step aimed at benefitting the common man, public sector OMCs have launched the sale of 5kg LPG cylinders under the free trade LPG scheme at 100 additional locations across Delhi. This will benefit the economically weaker sections, students, migrant labour and others who do not have a proof of address etc. They can buy a 5kg LPG cylinder at market price on ‘Cash and Carry’ basis as per their convenience from any authorised outlet, including retail outlets of Public Sector OMCs and designated shops located all across Delhi.
The government launched a scheme for the direct transfer of LPG subsidy to consumers across 54 districts on November 15, 2014. Aptly named PAHAL, the scheme will cover the entire country from January 1, 2015.The scheme, which will benefit over 15 crore LPG consumers, will be the largest direct cash transfer scheme in the world.
The ministry has approved expansion of the Corporate Social Responsibility (CSR) fund scheme for all Below the Poverty Line (BPL) households, including those living in urban areas. This will immensely benefit poor households.
As part of the government’s agenda to benefit the backward sections of the society, the Ministry of Petroleum and Natural Gas has, for the first time, reserved 27 per cent of new retail outlets for citizens falling under Other Backward Castes category, in addition to 22.5 per cent reservation for scheduled castes/ scheduled tribes. This enables public sector OMCs to further the government’s objectives of growth with equity.
The ministry has unveiled a series of initiatives under the ‘Swachh Bharat Mission.’ The mission aims at creating awareness among the masses by involving eminent personalities from various fields, industry and government. As part of this drive, oil sector PSUs have taken up construction of over 6,000 school toilets. Work has already begun on construction of 150 toilets. Toilets in schools are expected to reduce the drop-out rate among girl students. OMCs have also initiated a campaign to provide clean toilets at retail outlets. Oil and gas companies have launched cleanliness drives and awareness campaigns, and adopted villages and localities near their operational areas for their upkeep.
India’s state-owned Oil and Gas companies, under the guidance of the Ministry of Petroleum and Natural Gas, are now working to ignite the interest of students in areas of energy efficiency, fuel conservation and measures to cut down oil and gas consumption. Under the aegis of the PCRA, scholarships are being introduced for meritorious students selected through national level quiz/ debate/ essay/ painting competitions, as part of the Oil & Gas Conservation Fortnight held in January every year.
Indian Oil Corporation Ltd, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd are progressively using solar energy for lighting their retail outlets. So far, 2,140 of their retail outlets have been powered by solar energy. The target is to increase the number to 7,200 by March 31, 2017. The expenditure incurred on solarisation of one retail outlet ranges from Rs10 lakh to Rs 25 lakh and these companies are developing a model to provide soft loans to dealers to fund this investment.
The demand of the Indian gas market is met from domestic gas sources and imported Re-gasified Liquefied Natural Gas (R-LNG). In the first half of 2014-15, 74.79 MMSCMD of domestic gas, along with 44.55 MMSCMD imported LNG was consumed. At present, the fertilizer sector (urea) is the largest consumer of domestic gas, followed by the power sector. The ministry has given the highest priority in allocation of natural gas to cater to the transport (CNG) segment and domestic households (PNG).
The ministry is working on a plan to connect one crore households through PNG network in five years. The Petroleum and Natural Gas Regulatory Board has invited bids for authorising entities to develop city gas distribution networks in 14 new geographical areas in its fourth bidding round. Further bids for 41 new districts will be invited in early 2015.
At present, 15,000 km of gas pipeline network exists in the country. It is proposed to build another 15,000 km of additional gas pipeline to complete the national grid. Out of the proposed 15,000 km gas pipeline, 11,900 km has already been authorised and is in the process of implementation. To expedite the completion of the national gas grid, three pipeline sections, 2,500 km long in total have been identified for development in Public Private Partnership (PPP) mode.
The ministry has rolled out an elaborate plan to reassess hydrocarbon resources in India’s sedimentary basins. A multi-organisation team has been constituted to implement the project. The report is likely to be completed by March 2016.The last assessment was done for 15 sedimentary basins, about 20 years ago. The present project, which will cost around Rs 124 crore, will make use of the geo-scientific data collected through exploration of blocks in the last 20 years and re-estimate the potential of hydrocarbon resources. This information will provide greater clarity to future investors on the prospects of the basins.
Within five months of taking charge, the National Democratic Alliance Government took a bold decision by revising gas prices and putting to rest all speculation and doubts regarding this long-pending issue. While doing so, it was ensured that while gas-producing companies got their due, the hike in price did not severely impact consumers. The increase in gas prices on the basis of the present formula is 75 per cent less than the originaI formuIa arrived at by the previous government. This increase in gas price, while incentivising exploration and production of gas in the country, significantly moderates the additional financial burden due to this increase on prices of piped and compressed natural gas, cost of production in gas-based power plants and fertiliser subsidy.
Following the honourable Prime Minister Narendra Modi’s clarion call to make India a manufacturing hub, the ministry has already set in motion the process to identify equipment and products in the oil sector that can be domestically manufactured.
The government has given the much-needed push to blend five per cent ethanol with petrol. This programme was launched in January 2003. In November 2012, it was decided that the procurement price was to be determined between the Oil Marketing Companies (OMCs) and suppliers of ethanol. The pricing mechanism adopted by public sector OMCs, by linking it to the refinery transfer price of petrol had drawbacks. In December 2014, the government took a decision to procure ethanol at a fixed delivered price, ranging between Rs 48.50 to Rs.49.50 per litre (including all taxes and transportation cost), depending upon the distance of distillery from the depot/installation of the OMCs. Ethanol produced from non-food feedstock, other than molasses, can also be procured, subject to its meeting the relevant BIS guidelines.
Given that India imports nearly 70 per cent of its crude oil requirement, the ministry, under Dharmendra Pradhan, has carried out a series of engagements with oil and gas producing nations, to secure India’s interests. A programme of cooperation in the oil and gas sector was signed between India and Russia in October 2014. India also participated in the Steering committee Meeting of TAPI in November 2014, to discuss the pipeline project with other partner countries — Turkmenistan, Afghanistan, and Pakistan. It was agreed that in order to fast-track the project, negotiations for both the upstream and TAPI pipeline, with potential consortium leaders have to proceed on a parallel basis.
There are nine ongoing projects being undertaken by oil sector PSUs, at an estimated cost of Rs 2,763 crore for upgradation of existing infrastructure, including crude oil pumping stations, tank farms, gas-gathering stations and oil and gas pipelines.
Prime Minister Narendra Modi dedicated the Unit II of OTPC Power Plant at Palatana,Tripura, on December 1, 2014, to the nation. The 726.6 MW gasbased power plant of the ONGC Tripura Power Company, having two independent units of 363.3 MW each, is one of the biggest clean development mechanism (CDM) projects of the world.
The total investment in the power project, gas pipelines, oil wells and transmission lines etc. is about Rs 10,000 crore, which is the single largest investment ever in the entire North-Eastern region. For incentivising exploration and production in the North-Eastern region, the 40 per cent subsidy on gas operations has been extended to the private companies operating in the region as well.
This provision of a level playing field is expected to boost exploration activities by private operators in the region, increase gas production and enhance the level of economic activities in the region.
