Vol. 6 | issue 7 | August 2012
Cover story
petroleum pricing
Oil & gas crisis
Controlling decontrol
Poor
governance of hydrocarbon reforms and a disjointed pursuit of policy
and regulatory changes have jeopardised the country’s energy security.
by Naresh Minocha
Reforms
in India’s oil and gas sectors are caught in a perpetual whirlpool. The
recent cut in excise duty on petrol, hike in diesel prices, rationing
of LPG, the move to recast the exploration and production framework, and
the proposed pooling of imported and domestic gas prices are a few
pointers in that direction.
Take
any segment – upstream (exploration and production), mid-stream (oil
and gas infrastructure such as pipelines), or downstream (refining and
petro-products marketing), each is bedevilled with uncertainty.
Big-bang
ideas, such as making India a global refining hub with a chain of
export-oriented refineries and radical restructuring, including mergers
of national oil companies to make them globally competitive, are
initially hailed but subsequently forgotten. The Government does not
even have a proper regulatory framework for oil and gas in place,
something that is crucial for the country’s energy, food, economic and
national security.
The
Ministry of Petroleum and Natural Gas continues to control exploration
and production of oil and gas through its lame-duck appendage, the
Directorate General of Hydrocarbons. This is despite the fact that the
Cabinet had approved the setting up of a statutory regulator –
Hydrocarbon Regulatory and Development Authority (HRDA) – way back in
November 1997. Similarly, the ministry continues to regulate pricing,
subsidisation and marketing of automobile and domestic fuels in the
refining sector, which form the core of the downstream segment. This is a
stand that is also evident in the case of pricing and marketing of
natural gas as also of gas produced under production sharing contracts
(PSCs) that were supposed to provide pricing and marketing freedom....................READ MORE
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