N. Ravi Kumar

"Increase in crude oil prices has hit developing nations"

Focus on New Exploration Licensing Policy Three gas pipeline projects under consideration

CHENNAI: A decision on granting freedom to national oil marketing companies to increase petrol and diesel prices in the event of Indian basket of crude breaching the $ 70 a barrel mark is yet to be taken, Union Minister of Petroleum and Natural Gas Murli Deora has said.

"We are talking on this issue ... no decision is yet taken," he said, while underscoring the need for the Government to give some freedom and simultaneously maintain some control over the companies.

"The Government has to have some control over them, otherwise the consumers, especially poor people would suffer," he told The Hindu in an interview during his visit to Chennai on Saturday.

The unprecedented increase in crude oil prices (that is cited as the reason for the recent increase in petrol and diesel prices) had shaken the world, particularly the developing countries like India. "The prices have gone up so high that all their economic planning got hit," he pointed out.

Available options

Under the circumstances, the options available to the country were to increase the domestic crude (oil) production. Given that the production was not satisfactory India imports 70 per cent of the requirement the Government was laying emphasis on the New Exploration Licensing Policy (NELP) under which global oil majors would bid for the oil and gas blocks.

The second solution, he said, was to look for equity oil under which Indian companies participate in the development of oil fields abroad such as those in Sudan, Russia and Vietnam, and get a share of produce at a concessional rate. Another solution was to look at alternative sources of energy such as ethanol, bio-diesel. But "unfortunately not much has been done ... all at initial stages."

The emphasis was also on bringing natural gas from other countries, the Minister said, pointing out that three gas pipeline projects were under consideration. "One is the famous Iran-Pak-India pipeline," Mr. Deora said. To a query on the uncertainties surrounding the project, he said the "project is alive" and the Government was solving the problems.

Another pipeline project was TAPI that stood for Turkmenistan-Afghanistan-Pakistan-India. Noting that a World Bank team had recently met him and highlighted "that there is a lot of oil and gas there," he said last week the Union Cabinet gave an in-principle clearance for participation in the project.

The third pipeline project was for bringing gas from Myanmar. Though there were two possible routes, the one coming directly from Myanmar to the northeastern parts of India was being considered. Apart from being the feedstock for new power projects natural gas, as compressed natural gas, in automobiles would reduce pollution.

On his visit to Chennai, he said it was for apprising the people of the circumstances that led to the increase the prices of petrol and diesel.

Stating that he would be convincing the Chief Ministers against levying sales tax on the incremental component of the fuel prices, the Minister said at least those States protesting against the increase should do so. By doing so, they would not lose a single paise. "Whatever they were getting they would get," he pointed out.

Sonia against hike

Stating that Congress President Sonia Gandhi was against increasing the price of cooking gas and kerosene since they were consumed by poorer sections of the society, he said she was also against a substantial rise in diesel prices. But the Government was helpless and "we had to increase diesel by two rupees."