Economy

‘Polls will not come in way of diesel price deregulation’

Richa Mishra Siddhartha P. Saikia New Delhi | Updated on November 23, 2017

Veerappa Moily

We need to encourage oil and gas exploration. Even the Opposition does not understand how patriotic it is to encourage more exploration. – Veerappa Moily

“Elections have no role to play in deciding diesel price,” says Petroleum & Natural Gas Minister M Veerappa Moily.

Had it not been for the steep fall in the rupee recently, Moily says he would have completed the process of diesel deregulation.

In an informal chat with Business Line, Moily shared his views on various aspects of the petroleum sector – oil and gas exploration, production as well as petroleum refining and retailing.

Excerpts:

Do the elections in the five States mean that there will be no revision in diesel price?

Election or no election, the process of deregulating diesel price is active now. Elections have no role to play in this process. But for the heavy rupee depreciation and rise in international crude oil prices, I would have completed the diesel deregulation process. The companies have been able to narrow their under-recoveries (losses incurred for selling diesel at controlled price) from around Rs 14-15 a litre, to Rs 8 and Rs 9/litre now.

We have no control over imported crude oil prices, which are arbitrarily decided by the OPEC. We are helpless. People should understand that we have no role to play in this.

Will you allow companies to increase diesel price by Re 1/ litre?

No. For now, we would stick to 40-50 paise increase in price.

How will you counter the fluctuations in global crude oil prices so that the domestic market is not impacted?

We need to encourage oil and gas exploration. Even the Opposition does not understand how patriotic it is to encourage more exploration.

If we are in position to find more oil and gas, we can determine the price. We have to be careful about the statements we make. One statement can create panic in the market and investors will not come forward.

When do you propose to take a call on the Parikh panel recommendations? Would you consider the Finance Ministry’s dissent?

We are working on it. The Finance Ministry can send their remarks. I am not worried. Whatever the final decision, the Cabinet Committee on Economic Affairs will take a call. There is nothing personal about the Finance Ministry’s views. The Finance Minister will have a view because he needs to take care of the current account deficit. If I was in his place, I would also have done the same.

They (Finance Ministry) have an approach with regard to consolidation of the fiscal regime. They have raised an issue (the Finance Ministry has pitched for export parity price). But having given a dissent does not mean this situation will continue. They can change their mind. We will form our view on the Parikh panel recommendations, circulate an inter-ministerial note, and only after due consultations, approach the Cabinet.

You spoke about encouraging exploration. How do you propose to retain the interests of companies given their differences with the Ministry?

We are constantly working on incentivising the players. We are proposing changes in the future production sharing contracts (PSCs). For the existing PSCs, whatever clarifications we needed to issue, have been notified.

I am meeting investors on November 26 in Mumbai. I am also meeting fund managers. The Ministry will also make a presentation on what it has done. We want to discuss some success stories, such as Cairn, ONGC, to give people a feel of reality.

The 10th round of NELP will be launched in January. We have already come out with a shale gas policy. The Ministry is finalising a second round of shale gas policy (for private explorers).

Coal bed methane (CBM) exploration has not progressed. What is your take on it?

CBM is not successful despite India having the fourth largest reservoir of coal, because we are not bringing in any technology. Coal India is a monopoly and is doing nothing. Now, I am making them accountable. Moreover, I am also coming out with a revised policy for CBM that will help things to move faster. I want Coal India to go ahead on CBM. If they do not want to, then we will give the blocks to others. CBM is our (Petroleum Ministry’s) domain.

Reliance Industries wants the Ministry to take a call on appointing an external consultant to assess the KG D6 reservoir. Have you taken any decision yet?

The matter of appointing an international consultant has to be decided by the block management committee, which has a representative of the contractor and the Government. If they are not able to sort out the issue, they would refer it to the Ministry. We will then take a decision. The contractor has proposed appointing a third party, which is opposed by our officials. Naturally, the issue would come to the Ministry. I am yet to get the paper.

Published on November 17, 2013

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