M. Veerappa Moily, Union Minister for Petroleum & Natural Gas, on Wednesday said that he would not burden public sector upstream companies such as ONGC and OIL India to share more subsidy.
The Government has decided to revise the natural gas prices in India by April 1, 2014. This is likely to increase oil subsidy. And there are reports saying OIL and ONGC may have to shell out more funds to meet the higher subsidy.
" I assure that I would fight it out," Moily said while addressing an Assocham seminar on Indian Economy in the Context of Global Energy Scenario.
ONGC said that the Government's decision to increase the natural gas prices from April 2014 is a step in the right direction.
"However, any increase in subsidy burden will be detrimental. ONGC, OIL will be hit if our share of subsidy compensation is tweaked," ONGC Chairman Sudhir Vasudeva said.
Public-private partnership
Vasudeva, Chairman of country's largest explorer, said that most of the new hydrocarbon funds are in offshore locations.
"The hope is there to explore the untapped resources at shortest possible time, while getting access to required technology," Vasudeva said.
Moving from the New Exploration Licensing Policy (NELP) regime to OALP scheme would help to attract more investors to exploit hydrocarbon in the country, he said.
"I would propose private-public partnership to represent India to acquire hydrocarbon assets overseas," Vasudeva said.
Oil consumption
The Petroleum Minister also said that India's oil consumption is expected to grow rapidly till 2030 but the domestic sources of oil are limited.
"The demand growth is driven by growth in vehicular usage and increasing petrochemical capacities and consequently the demand-supply gap for oil is set to continuously widen leading to increased dependence on imports," Moily said.
BCG study
A recent BCG study indicated that India's oil consumption is expected to grow to approximately 250-300 million tonnes by 2030.
While in 2011, diesel accounted for 39 per cent of all consumed products, its share will rise to almost 50 per cent in 2030. Petrol with an increase from 9 per cent to 15 per cent and naphtha with an increase from 7 per cent to 15 per cent share expect similar growth.
Given the limited domestic availability of oil and gas that constitutes almost 40 per cent of the energy basket, the country is compelled to import over 75 per cent of its domestic requirement and subject itself to the vagaries of a volatile international price scenario.
EGoM meet today
An Empowered Group of Ministers (EGoM) headed by Defence Minister A.K. Antony is likely to meet on Wednesday to discuss the allocation of natural gas to several sectors from Reliance Industries Ltd's KG-D6 block.
There are three proposals to be considered by EGoM, said Petroleum Secretary Vivek Rae.
The first proposal is to maintain status-quo in natural gas supplies to priority sectors including fertiliser, cooking gas, power and city gas network, he said.
The second proposal to be considered by the panel is to "equal prioritize'' gas allocation to these four sectors and third entails giving the gas to only fertiliser and power sectors.
The current output from KG-D6 block is nearly 14 million metric standard cubic meters a day, he said.