Yet to take a view on diesel hike: Moily

Last Updated: Sat, Jan 05, 2013 08:11 hrs

New Delhi: On the proposal to hike diesel prices in phased manner as one of the suggestions of Kelkar committee, the ministry is yet to take a view on it, said Union Petroleum & Natural Gas Minister M Veerappa Moily.

While addressing The Associated Chambers of Commerce and Industry of India (ASSOCHAM) conference on Oil & Gas in India in New Delhi, Moily said that the road map is being drawn to secure energy independence by the year 2030.

"Ministry is working on a detailed road map having well defined action plan to achieve the target in a way the import dependence is reduced by 50% by 2020, 75% by 2025 and 100% by 2030 for complete energy independence by 2030," said Moily.

"In addition to importing greater quantities of crude oil, the government has increased its focus on enhancing reserves and production through increased domestic exploration activity as well as securing equity oil reserves. Besides, upstream companies are emphasizing on secondary and tertiary of hydrocarbons from the fields," he stressed.

"To cater to a rise in the import of LNG, India has initiated investment plans for increasing its current RLNG handling capacity of 12.5 MMTPA to 45 MMTPA by 2017. By the year 2016-17, we envisage a Natural Gas Grid measuring 31,757 kms of pipelines across the country," said Moily.

Moily also pointed out, while coal remains the mainstay for power generation for India and fuels 70% of the power generation, the deficit in supply for coal has resulted in widening of demand supply gap which was only 59.98 million tonnes in 2008-09 has increased to 98.93 million tonnes in 2011-12.

Currently this gap is being entirely met through import of high quality coal from Indonesia, Philippines and Australia, he said.

During the 12th plan, import dependence on crude oil is expected to increase from 76% in FY 2010-11 to 80% in 2016-17.

"We majorly rely on coal to the extent of 53% while crude accounts for 31% of our energy basket. Natural Gas, Hydro power and Nuclear power contribute 9%, 6% and 1% respectively. Also need to reduce our reliance on coal and increase the role of natural gas," said the minister.

"Under the New Exploration Licensing Policy (NELP), the government has provided an investment climate in which all required ingredients for attracting capital are present, such as level-playing fields for players, stability in legislative and fiscal frameworks, a robust regulatory mechanism, enforceability of contracts and attractive fiscal incentives," he said.

"There has been a steady increase in the number of companies carrying out E&P activities in the country and as on date 84 companies are working in India (45 operators and 39 non operators). Few of the oil majors working in India are BP, BG, BHP Billiton, ENI," added Moily.

He said his ministry has been continuously improvising the NELP regime by bringing in more transparency and enabling policies for facilitating E&P operations such as New Extension policy, Rig holiday policy etc.

According to projections, up-to 2030, 96% of the growth in energy demand will be in the non-OECD countries.

"More than 50% of the growth will be accounted for by China and India alone. In the renewable energy sector, hydrocarbons will continue to be the predominant component in our energy basket," said Moily.

"Constituting of around 15% of India's GDP the oil and gas sector is of prime importance to the national economy. India's petroleum imports as percentage of foreign reserves has been more than 30% consistently over the last few years.

"It is also seen that for the year 2010-11, value wise petroleum import are found to be 34.8% of the foreign reserves that India held up as against 23.18% seen in 2002-03," he said.

D. K Sarraf, Managing Director, ONGC Videsh Limited, said, "Till 31st march 2012, OVL has made cumulative investment of about 14 billion USD, 85% of which is in producing asset. Two-third of the investment has come from integral generation and the balance has been contributed by ONGC as equity, loan and guarantees."

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