PARLIAMENTARY CONSULTATIVE COMMITTEE DISCUSSES PETROLEUM REGULATORY BOARD BILL 2002

SEVERAL RESTRICTIVE CIRCULARS ABROGATED TO TAKE REFORMS FURTHER IN OIL SECTOR: RAM NAIK

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The Parliamentary Consultative Committee attached to the Ministry of Petroleum & Natural Gas discussed the Petroleum Regulatory Board Bill, 2002 in a meeting here today. While welcoming the introduction of Bill in Lok Sabha by Shri Ram Naik, Minister of Petroleum & Natural Gas, on 6^th May 2002, the Members made several suggestions to make the proposed Board more effective. The Members emphasised that the Board should facilitate both development of oil industry in free and fair competitive environment and also protect consumer interests.

Earlier, initiating discussions Shri Ram Naik informed the members that the need for setting up of the Regulatory Board was felt keeping in view the deregulation of oil sector w.e.f. 1^st April, 2002 which is aimed at bringing in fair competition, protection of the consumers and encouraging investments as well as punishing the deviant behaviour. The Bill covers refining, processing, storage, transportation, distribution, marketing and sale of petroleum and petroleum products, including natural gas.

The Minister also informed that in view of dismantling of Administered Pricing Mechanism (APM) effective 1.4.2002, many restrictive circulars and notifications have been abrogated thereby granting greater commercial freedom to oil companies. The abrogated circulars inter-alia include:

1. Grant of permission to use of Tank/Lorries of different Fishermen’s Societies for transportation of HSD/MS for their own society
2. Sanction of Consumer Pumps
3. Supply of HSD to Power Projects including consumers
4. Restrictions on billing and discount in respect of Inter-State supplies of Petroleum products
5. Use of LPG in place of dissolved acetylene gas
6. Pricing of packed LPG
7. Supplies of LPG to domestic customers

The Minister also informed the members about the decisions taken recently including finalisation of the mechanism to handle crude oil market volatilities through duty adjustments on a review undertaken every quarter. Due to excessive volatility in international oil market such review would be held earlier also. The first review resulted in reduction in excise duty on Diesel from 16% to 14% and on Petrol from 32% to 30% w.e.f. 4^th June, 2002. The next review would fall due in September 2002. The domestic retail prices have now been aligned with international prices and companies would make further adjustments on fortnightly basis. Towards increasing oil security of the country, Shri Naik said, Government launched effective campaign to promote third round of New Exploration Licensing Policy (NELP-III) with Road Shows at Singapore, London, Houston and Calgary. The Government also approved a proposal of ONGC Videsh Limited (OVL) to acquire 25% interest in a producing-oil field in Sudan with a share of 3 million tonnes of Crude Oil annually at an investment of about US $ 750 million (Rs. 3,750 crores).

Shri Santosh Kumar Gangwar, Minister of State for Petroleum & Natural Gas, Shri B.K. Chaturvedi, Secretary, Ministry of Petroleum & Natural Gas also attended the meeting. In addition senior officers of the Ministry, CMDs and other senior officers of Oil PSUs attended the meeting.

The following Members of the Committee attended the meeting: S/Shri Lal Bihari Tiwari, Jaswant Singh Bishnoi, Dr. Laxminarayan Pandey, Prof. Rasa Singh Rawat, Ram Singh Kaswan, Kishan Singh Sangwan, Col. D.R. Shandil, Nagmani, Jai Prakash, Dr. Sushil Kumar Indora, K.K. Kaliappan, Kunwar Sarvaraj Singh, Prasanna Acharaya, G. Srinivasa Rao, Ram Jeevan Singh, Dr. Girija Vyas, Dr. (Smt.) Sudha Yadav, Shyam Bihari Mishra and Harpal Singh Sathi (all from Lok Sabha); Prof. Ram Bakhsh Singh Verma, Amar Singh, Prof. Ram Deo Bhandari, N.R. Dasari, Satish Pradhan, Oscar Fernandes, Rajubhai Parmar, Dr. Arun Kumar Sharma and Ram Nath Kobind (all from Rajya Sabha).