The parliamentary standing committee on petroleum and natural gas has recommended transferring back the Department of Petrochemicals to the Ministry of Petroleum & Natural gas (MoPNG), which will lead to better policy formulation.

The committee felt that transfer of the Petrochemicals division from the Ministry of Chemicals & Fertilizers to the MoPNG will benefit both the petroleum and the petrochemicals sectors through better policy formulation and implementation and also utilising the synergies between two sectors. As the refineries need various sanctions, approvals, clearances, etc, it will be better if the departments are under the same Ministry.

“The committee recommend to the MMoPNG to examine the expediency of transfer of petrochemicals divisions from the Ministry of Chemicals & Fertilizers to Ministry of Petroleum & Natural Gas and in case the same is found beneficial to take up the issue with the Cabinet Secretariat for amendment of Allocation of Business Rules of the Government of India,” it added.

The panel pointed out that the department of Chemicals and Petrochemicals was transferred from the MoPNG to the Ministry of Chemicals and Fertilizers on June 5, 1991.

The Petrochemicals market in India is dominated by basic petrochemicals (about 45 per cent) in which upstream and downstream petroleum companies of the country have a large presence, it added.

Recently, ONGC commissioned the largest Petrochemical plant of the country at Bharuch, Gujarat. IOCL is also executing several Petrochemical projects to increase its present Petrochemical Industry Index (PTI) of about five per cent to 15 per cent by 2030. The Oil PSU Refineries under the Ministry of Petroleum and Natural Gas have a considerable budget in their IEBR every year under the head ‘Petrochemicals’.

“The MopNG acknowledges the importance of synergy between Petroleum & Petrochemicals sectors. However, on the issue of transfer of the Petrochemicals division from the Ministry of Chemicals & Fertilizers to the Ministry of Petroleum & Natural Gas, detailed deliberations amongst all the stakeholders are needed,” the Oil Ministry said in its response to the committee.