Oil minister Dharmendra Pradhan says the NDA government made the A.P. Shah panel report public within hours of its receipt
Bhubaneswar: In an interview a day after the A.P. Shah committee’s report on the dispute between state-owned Oil and Natural Gas Corp. Ltd (ONGC) and Reliance Industries Ltd (RIL) was made public, Union petroleum and natural gas minister Dharmendra Pradhan talked about swift action on the panel’s findings.
While ONGC declined to comment on the matter the moment, RIL said it would respond after examining the report.
Pradhan also spoke about how hydrocarbon resources are being used for achieving socioeconomic goals, adding how India’s energy policy in the last two years has laid emphasis on making regulations less intrusive, facilitating ease of doing business, making clean cooking fuel available in remote villages and ensuring the north-east is energy secure. Edited excerpts:
The justice A.P. Shah committee, which examined ONGC’s dispute with RIL indicts the latter for unfair enrichment due to gas flow between their fields between 2009 and 2015, and ONGC for not doing enough to develop its field in time. Since disputed gas flow started taking place during the United Progressive Alliance’s term, the report appears to be politically significant...
We made the Shah panel report public within hours of its receipt. This exposes the Congress’s claims that the Narendra Modi government is pro-corporate. Why did the previous government sit on this issue despite knowing the fields were connected?
Immediately after we came to power, we got an independent technical assessment done of the fields by DeGolyer & MacNaughton (D&M,a US-based consultancy) and got a quasi-judicial review of it by justice Shah and placed the report in the public domain.
The report has empowered us to take action, and we will do so within a month.
D&M’s report was a technical one on what happened in the fields geologically. Shah panel looked into acts of commission and omission by all stakeholders and suggested as per law who is bound to do what. The government will decide. The Congress claims the Modi government is friendly towards business. We will soon come to know who has been friendly with whom.
Your ministry is promoting consumption of LPG on a massive scale, especially in under-served areas. Accordingly, import of LPG has been going up in the recent months. Do we have enough bottling plants, infrastructure and gas import terminals to meet this surge in demand?
First, we need sufficient LPG supplies. Today, we import 40% of our close to 20 million tonne LPG requirement. The remaining 60% requirement is met from domestic production. In the coming years, this balance will get reversed. We may have to import 50-60% of our requirement and meet the rest from domestic supplies.
One recent trend in the global market is that LPG supplies to the US from the Middle East have come down due to the shale gas revolution in America.
Dharmendra Pradhan, 47Pradhan started his political career working on issues relating to unemployment, skill-based education and rehabilitation and resettlement of displaced farmers. After serving as a member of the Odisha legislature between 2000 and 2004, he got elected to the Lok Sabha in 2004. He was elected to the Rajya Sabha in 2012.
Through bilateral talks, we are trying to source more LPG, tapping into the surplus in world markets. We are also expanding our gas import facilities in ports. Today, imports are cheaper than domestically produced gas. We will balance supplies from both the sources to suit our cost considerations. In addition to adding capacity, we are also automating LPG bottling plants so that they can run more shifts and deliver more cylinders.
As consumption goes up, we are adding more LPG supplies, pipelines, storage facilities, import terminals and distributorships. Our current LPG requirement of 20 million tonnes is expected to touch 30 million tonnes in a few years.
Demand will go up because of our drive to issue 10 crore new LPG connections (five crore of this will be under the Pradhan Mantri Ujjwala Yojana meant for poor women who will get LPG connections without an upfront payment).
How many more distributorships will you open this year?
We are in the process of issuing 2,000 distributor permits. We have mapped the location of the existing 18,000 distributors to see the areas where services are at their weakest. New distributors will be allowed in places where no distributors exist now.
In September, we will allow a minimum of 1,000 new distributors in Uttar Pradesh.
What is the progress in implementing the north-east development plan?
Indian Oil Corp. is investing ₹ 500 crore in Tripura for setting up a petroleum and lubricant storage facility. Recently, when the Assam-Tripura highway got damaged, we transported auto fuel in trucks and LPG cylinders by train.
Since the north-eastern region is prone to natural calamities, we’ll set up a storage facility capable of holding at least two months’ fuel stock in each of these states. Numaligarh Refinery Ltd is now setting up a facility in Assam for producing ethanol from bamboo. This will convert biomass which is at present going waste into fuel and contribute to the local economy and to the nation’s energy security.
We’ve also reached an understanding with Bangladesh so that we can deliver fuel to the north-east through the neighbouring country by road.
Is expanding LPG consumption a good business proposition for our oil marketing companies?
Energy economy and women’s empowerment are closely linked. LPG has reached a substantial part of the population, but not to the bottom of the pyramid, for whom the upfront cost and the cost of refills is a challenge. The Ujjwala scheme of giving LPG connections without upfront payment to women below poverty line is addressing this. Now, we have 16 crore consumers who accept LPG subsidy and another two crore consumers who do not.
We are trying to create awareness among the first category that subsidy is actually meant for the really needy, not for everyone. Expanding LPG consumption is not a business for our public sector companies, it is a social empowerment tool.