NEW SCHEME OF RURAL LPG DISTRIBUTOR (GRAMIN LPG VITRAK) ON ANVIL
SHRI DEORA ASSUMES CHARGE AS PETROLEUM MINISTER AND SHRI JITIN PRASADA AS MOS, PETROLEUM & NATURAL GAS
The Minister of Petroleum & Natural Gas, Shri Murli Deora and Minister of State for Petroleum and Natural Gas Shri Jitin Prasada thanked the people of India for the faith reposed in the UPA; this has also been done with the highest majority since 1991. This trust of the people places upon the Ministry of Petroleum & Natural Gas the responsibility of meeting the mammoth aspirations of the people of the country. “Our endeavour will be to fulfil the promises made in the Manifesto and provide fuel to the people of India at reasonable prices and ensure the requirements of energy security of the country,” they observed while assuming charge of their respective offices here today. Shri Deora returned to be the Petroleum Minister for second term in succession while Shri Jitin Prasada was the Minister of State for Steel in the previous Government.
Speaking to media Shri Deora said that further accelerating domestic exploration and production would continue to be a priority. Elaborating agenda of the Ministry under his fresh tenure, he said these include adding significant refining capacities, launching a New LPG Rural Distributor Scheme, addressing the issue of affordable prices for poor and the sound health of PSUs, preparing a road map for adding more and more cities to the present number of 30 cities which have CNG distribution networks, giving a boost to the efforts towards overseas acquisition of oil & gas assets.
ACHIEVEMENTS OF LAST 5 YEARS
1. Prices of 4 Sensitive Petroleum Products
• International oil prices have been rising continuously since 2004. The year 2008-09 saw extreme volatility. When the Indian basket of crude oil touched UD $ 142 in July 2008, the required price increase was Rs.18 per litre for petrol, Rs.28 per litre for Diesel, Rs.35 per litre for PDS Kerosene and Rs.340 per Cylinder for Domestic LPG. However, to protect the interest of the consumers, the retail selling prices were increased only by Rs.5 per litre for Petrol, Rs.3 per litre for Diesel and Rs.50 per cylinder for Domestic LPG.
• The retail selling prices of Petrol and Diesel were reduced by Rs.5 per litre and Rs.2 per litre respectively on 6.12.2008. Again on 29.1.2009, prices of Petrol, Diesel and Domestic LPG were reduced by Rs.5 per litre, Rs.2 per litre and Rs.25 per cylinder respectively.
• Today, the prices of Petrol and Diesel are even lower than the prices in June 2006.
• The price of PDS Kerosene was not revised even once during the last 5 years as PDS Kerosene serves the lighting and cooking needs of the common man in the far flung areas of the country.
• Government took the burden of the Public Sector OMCs’ under-recoveries and issued Oil Bonds of Rs.71,292 crore during 2008-09 while the Upstream Oil PSUs contributed Rs.32,000 crore in price discounts. None of the 3 OMCs will end the year 2008-09 in loss.
• Uninterrupted supplies of Domestic LPG have been maintained to more than 11 crore households covering about 50% of the country’s population.
2. Oil and Gas Exploration
• This area has been our priority and will continue to be so.
• The natural gas find in KG Basin deep water offshore block D-6 will about double the country’s production from the present level of 82 MMSCMD. Production from KG Basin commenced in April 2009, and is expected to go up to 80 MMSCMD of gas very soon.
• In Rajasthan, CAIRN-ONGC consortium’s RJ-ON-90/1 block in Barmer district, oil production is expected to commence shortly. The peak production would be 7-8 MMTPA and would increase the country’s oil production by 25%.
• Under NELP, Government has signed 113 Production Sharing Contracts (PSCs) for exploratory blocks in the last 5 years which has increased area under exploration by 30%. Under NELP-VII, 44 exploration blocks were awarded and contracts concluded in respect of 41 blocks with 17 operators (including 5 foreign incorporated companies).
• In the last 5 years, 166 oil and gas discoveries have been made in various States, Deepwater area in Eastern & Western offshore.
• Overseas oil and gas production has doubled in the last 5 years and reached a level of about 8.7 MMTOE in 2008-09.
• The presence of ONGC Videsh Limited and other PSUs in equity oil abroad increased to 22 countries as against 7 countries in 2003-04.
• This year, the highest number of blocks (70) have been offered under the NELP VIII. 10 coal blocks have been offered under CBM IV. The dates for the road shows would be decided shortly.
3. Increase in Refinery Capacity and Growth in Exports
• With the commissioning of RIL’s 29 MMTPA refinery in December 2008, the refining capacity in the country increased to 178 MMTPA from 127 MMTPA in 2004.
• Capacity expansion of another 63 MMTPA is envisaged during the XIth Five Year Plan. Of this, new refineries are being set up by IOCL at Paradip (15 MMTPA), HPCL at Bhatinda (9 MMTPA) and BPCL at Bina (6 MMTPA).
• From being a net importer of petroleum products, India has emerged a net exporter of petroleum products. Exports of petroleum products have increased from US$ 6.66 billion in 2004-05 to US$ 26.29 billion in 2008-09, making petroleum products the largest foreign exchange earner in the merchandize category.
4. Setting up of Rajiv Gandhi Institute of Petroleum Technology (RGIPT) at Rae Bareli, UP
• The government took the initiative to get the RGIPT Bill passed by the Parliament during the Winter Session of Parliament 2007. The Institute has been set up at Jais, District Rae Bareli, at a cost of Rs. 695.58 crore.
• With the academic year 2008-09, the courses in Petroleum and Energy Sciences and an MBA program have commenced at Rae Bareli and Noida.
5. Indian Strategic Petroleum Reserves Ltd. (ISPRL)
• In order to enhance the energy security of the country and to safeguard against short-term disruptions in crude oil supply, Government has approved the setting up of a 5 million Metric Tones (MMT) strategic storage of crude oil at three locations. These are being set up Vizag (1.0 MMT), Mangalore (1.5 MMT) and Padur, Udipi (2.5 MMT).
• The Strategic Crude Oil Reserves would be located in the underground rock caverns and are expected to be operational by 2012.
• Crude oil from the reserves will be released by a Government appointed High Power Committee in the event of any short-term disruption in supplies, a natural calamity or any unforeseen global event leading to an abnormal increase in prices.
Priority areas for the first 100 days of the Government
The manifesto of the Indian National Congress spells out the following action points relating to the Oil & Gas sector:
• The pace of Oil & Gas exploration will be intensified
• India’s oil diplomacy will be pursued aggressively
• The Government will implement a scheme to supply energy to poor families at affordable prices.
1. A new Scheme of Rural LPG Distributor (Gramin LPG Vitrak):
Objective: The scheme would help in enhancing LPG coverage in rural areas where it is not viable at present.
At present, there are about 9,350 LPG distributors in the country serving a population of 10.6 crore LPG customers. Of these distributors, about 25% are serving rural areas. Presently, LPG distributorships are being set up in towns and villages having a population of 5,000 and potential of 2,500 refills per month, considering the population within 15 KMs from a town or village. Very few new locations are found commercially viable under the above scheme. The Gramin LPG Vitrak scheme would be launched at locations having potential of upto 1,000 refills per month, and the proprietor himself/ herself would operate it with the help of two staff. The godown and the showroom would be much smaller in size compared to a normal distributorship. Total capital investment will be about Rs.3,40,000 and there will be a potential for a monthly earning of Rs.13,800.
2. Pricing of Petroleum Products
The Government will address the issue of the need to provide fuel and petroleum products to the people at reasonable prices along with the requirement of the Oil marketing Companies (OMCs) to run profitably and efficiently. Policy decisions in this context will be taken shortly.
3. Road map for extending City Gas services
As of now, city gas is being supplied to 30 cities. CNG is a cheaper and greener fuel than LPG, for domestic cooking as well as for vehicular transport. Expansion of CNG outlets was started in 2008 in Mumbai & Delhi. Another 50 outlets will be added to present number of 300 by the end of 2009 in these 2 cities. Further, CNG operations will be started in 10 more cities by end of 2009. A road map will be prepared by a working group for expanding the city gas distribution to more and more cities/ towns over the next five years for cooking and for transportation.
4. Acquisition of Oil & Gas Assets Abroad
Signing Agreement with Kazakhastan: As a result of Government to Government efforts, ONGC Videsh Limited (OVL) has concluded Head of Agreement (HOA) with Kazmunaigaz (KMG) for equation of Participating Interest (PI) in the Satpayev exploratory block in Kazakhstan. The total investment in the project is likely to be USD 400 Million in the exploration phase. A note dated 28.04.2009 has been submitted seeking approval of CCEA for OVL’s investment in Satpayev project. Decision of CCEA will be obtained.
5. Pace of Oil & Gas Exploration will be intensified through NELP VIII & CBM IV, which have been launched.
The eighth round of NELP (NELP-VIII) offering 70 blocks covering an area of about 1.7 lakh sq. km. and fourth round of CBM (CBM-IV) offering 10 blocks covering an area of about 5000 sq. km. were launched on 9.4.2009 and the bid closing date is 10.08.2009. During the next 100 days, road shows will be held.
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