January 15, 2002

'20'

GOVERNMENT FULLY PREPARED FOR DEREGULATION OF OIL SECTOR: SHRI RAM NAIK

    Shri Ram Naik, Minister of Petroleum & Natural Gas has said that Government is taking appropriate steps to ensure that the challenges of deregulation and restructuring of petroleum sector are fully met. Inaugurating the 4^th "Indian Oil and Gas Conference" (IOGC), organised by Tata Energy & Research Institute, here today, Shri Naik said that a Draft Bill to establish a Statutory Petroleum Regulatory Board is under finalisation. The detailed modalities are being worked out on the issues requiring Government’s intervention. The Minister stressed that the Government is fully geared for the proposed de-regulation effective 1^st April, 2002. The IOGC 2002 is being organised under the patronage of the Petroleum Minister. The theme of this year’s conference is "Deregulation & Restructuring of Oil and Gas Sectors : Challenges & Opportunities".

    Narrating the challenges for de-regulation of oil sector, Shri Naik said that these included ensuring uninterrupted and adequate supply of petroleum products at fair prices throughout the country including far-flung areas. To ensure a level-playing field and to promote competition, access to monopolistic infrastructure in the nature of common carrier system on non-discriminatory basis and at reasonable tariffs by all entities would need to be ensured. As regards the protection of consumers’ interests and redressal of their grievances, the Minister opined that a system would be needed to put in place which would also ensure resolving the disputes amongst entities and consumer groups. Other challenges include having an appropriate duty structure, balanced development of the oil sector, administration of subsidies on Kerosene and LPG and freight subsidy for far-flung areas, etc.

    The Minister further said that the deregulated era would throw open immense opportunities for all the investors and the consumers. There would be opportunities of investment by the private sector in different activities i.e. Exploration and production, pipelines, marketing, storage and distribution infrastructure, LNG terminals, etc. The Minister pointed out the disinvestment of Government’s share in IBP which is scheduled to take place even before the crucial date of dismantling. Shri Naik felt that with the reduced controls, the Public Sector Oil companies would have greater opportunities of restructuring and attaining global competitiveness. On the other hand the consumers would also be benefited with the availability of better quality products at reasonable prices and also efficient consumer services.

    Outlining several important actions taken since 1^st April 1998 when the phased de-regulation started, Shri Naik informed that the milestones set by the Government in 1997 for the transition period have largely been met. These include withdrawal of cost plus formula for crude oil produced by national oil companies, abolition of the system of retention pricing for the refineries, decontrolling of all petroleum products other than Petrol, Diesel, Kerosene (PDS) and domestic LPG, etc.