The Hindu Business Line : ‘No parking lots for me post-retirement’

A crossword and Sudoku buff, and a Carnatic music lover, Mr M. S. Srinivasan, is not likely to suffer retirement blues, now that he has bowed out as Petroleum Secretary on July 31.

During his tenure, marked by its share of controversies, he grappled with soaring global crude prices, dealt with domestic gas pricing and set up a downstream regulator.

But to ensure a smooth running was not an easy job in a sector that has dominant corporate names such as Reliance Industries (RIL), Essar and new players waiting in the wings. An astute civil servant with a dry sense of humour, he courted controversy till the last day in office.

“Catch me if you can,” said Mr Srinivasan, just hours before he demitted office, when a group of journalists said they would like to keep in touch with him to seek his views on the sector he had come to know so well. Though his stint as Secretary started in January 2006, he joined the Ministry as Additional Secretary in November 2002.

Ask him what he will do after his over six-year stint in the Petroleum Ministry, and pat comes the reply: “No parking lots for me post-retirement. Next two months I will be here (Delhi) and then I intend moving down South.”

This, despite the fact that in the last two years his name was tipped for Defence Secretary, Home Secretary, Finance Secretary, Executive Director World Bank, CAG and also Chairman, Competition Commission of India (CCI).

And though he claimed that he was not “high-profile”, he found his name drawn into sticky issues, whether it was on the extensions to be granted to Mr Subir Raha, former Chief of ONGC, and Mr Proshanto Banerjee, former Chairman and Managing Director of GAIL (India), or the decision on RIL’s domestic gas pricing.

Marketing companies

Mention some of the turbulence and major decisions taken during his stint, and he is quick to retort: “I am not responsible for high crude prices.”

Global prices of crude oil and petroleum products have remained high and volatile, and the phenomenal increase in the prices of crude oil and petroleum products in the international market have assumed alarming proportions.

The Indian crude basket on July 31 stood at $123.72 a barrel after touching a high of $142.04 on July 3. Mr Srinivasan’s dry wit and repartee were more frequently reserved for those who earned his ire, including high-profile CEOs and journalists. As he said: “If you sit on this chair, you realise what a tightrope walk it is.”

The dynamics of the oil and gas sector in India had changed to a large extent by the time Mr Srinivasan took the helm, and he negotiated the course with ease.

While the refining sector continued to do well, marketing remained a cause for concern as the public sector oil marketing companies (OMCs) suffered huge revenue losses arising from selling petroleum products below the cost price and private players seeking a level-playing field.

Though the Government offers a compensation package to PSU OMCs, no such package is available for private sector players, and this became a bone of contention. The important issue that came to fruition during his tenure was the domestic gas pricing formula and gas utilisation policy.

Achievements

The operator of the New Exploration Licensing Policy (NELP) block in the Krishna Godavari Basin, RIL, had submitted a formula for valuation of gas for Government approval, as per the provisions of the product-sharing contract.

An empowered group of ministers was constituted to examine and decide the issue relating to gas pricing and commercial utilisation of gas under NELP.

A significant achievement during his tenure was the setting up of the Petroleum and Natural Gas Regulatory Board to regulate refining, processing, storage, transportation, distribution, marketing and sale of petroleum, petroleum products and natural gas, excluding production of crude oil and natural gas, to protect the interests of consumers and entities.

Another milestone during Mr Srinivasan’s stint was the largest foreign direct investment brought into petroleum refining. The sector saw investment by Mittal Investment of Rs 3,506 crore (or about five per cent of total FDI in 2006-07), in collaboration with a PSU.

In June 2007 the Cabinet had allowed Mittal Investment to acquire a 49 per cent stake in Hindustan Petroleum Corporation Ltd’s Bhatinda refinery project. Acquiring oil and gas acreages overseas was another area that saw a lot of focus.

But the challenges are still there, and a lot can still be done on the exploration and production fronts, Mr Srinivasan said. Challenges that his successor, Mr R. S. Pandey, has now to tackle.

Just after assuming office on August 1, Mr Pandey said:

“Doing a balancing job in the sector which affects the lives of everyone and all sectors of the economy is a great challenge in itself.

“Accelerating domestic exploration and production efforts, guaranteeing the supply of petroleum products, along with ensuring the health of oil PSUs and removing inefficiencies would be amongst (my) priorities.”