The Hindu : National : Deora: decontrol of oil prices will hit common man

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Monday, Jul 06, 2009
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Deora: decontrol of oil prices will hit common man

N. Ravi Kumar

State government’s help sought for getting land for petrol pumps
Plan to popularise LPG in rural areas

CHENNAI: Decontrolling the prices of petroleum products of mass consumption such as petrol and diesel will severely impact the common man. With the international crude oil prices on the rise this is not the time to decontrol, according to Minister for Petroleum and Natural Gas Murli Deora.

Since the oil companies need not seek permission from the government before revising the prices in a decontrolled scenario, what would happen if there was another spike in crude oil prices, he asked in response to a query.

Mr. Deora was speaking to The Hindu after participating in a function organised at the Chennai Petroleum Corporation Ltd. here on Saturday.

On the impact of under-recoveries of the oil companies on their proposed projects, he said the refinery projects in Bina and Bhatinda had to be supported by the State governments by way of incentives and tax concessions.

Union Minister of State for Petroleum and Natural Gas Jitin Prasada, who was present during the interview, said land for retail outlets was not easily available in the cities for the oil companies.

On the need for more outlets, the Ministers underscored the need for making available the products at locations closer to the consumers.

Mr. Deora said that during his meeting with Tamil Nadu Chief Minister M. Karunanidhi on Saturday he sought the State government’s assistance to the oil companies for getting land for petrol pumps.

To a query on the measures to enhance energy security, Mr. Deora said the government was looking forward to production from two of the biggest projects — gas from the Krishna Godavari basin and Cairn India’s Barmer oilfield in Rajasthan. The latter would produce oil equivalent to 25 per cent of the existing oil production in the country. The production from KG basin would help to create gas highways and meet the city gas requirements.

The Ministry was also working on a plan to popularise LPG in rural areas. The objective was to provide 5.5 crore new connections by 2015. This would take the total number of consumers to 16 crores with most of the new connections released in rural areas.

The plan was to have a distributor for every 1,000 connections in a rural area. The investment by the distributor would be in the range of Rs. 3 to Rs. 3.5 lakh.

Biometric smart cards

To ensure that PDS kerosene reached the targeted beneficiaries, the Ministry was working on a project under which biometric smart cards would be issued to the consumers. To begin with it would be launched in large urban cities, Mr. Deora said.

The oil companies were asked to double their allocation towards corporate social responsibility initiatives from the existing one per cent of their profit, he said.

Apart from continuing its focus on bidding for oilfields abroad and thereby getting equity oil, the government was evaluating the prospects of creating strategic reserves. The government was also offering under the New Exploration Licensing Policy (NELP - VIII) 70 exploration blocks. Under the fourth round of the Coal Bed Methane Policy (CBM-IV) for exploration and production of Coal Bed Methane, it was offering 10 CBM blocks.

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