PSUs-OMCs address issues related to fuel pricing
To enhance the availability of natural gas for power generation, the Government has placed Liquefied Natural Gas (LNG) under the Open General License (OGL) category, thereby allowing power plants to import LNG as per their requirements on mutually agreed commercial terms with suppliers https://www.opec.org/opec_web/en/.
This update was given by Minister of State in the Ministry of Petroleum and Natural Gas Suresh Gopi in a written reply in Rajya Sabha on 10 Mar.
Gas-based plants in the country are operating at very low Plant Load Factor, he informed the Sabha members https://fieo.org/.
The power plants imported about 9.58 MMSCMD during 2024-25 (Apr-Jan).
The Government from time to time have brought out schemes for competitive procurement of power from gas-based power plants during peak demand periods, he said https://www.nseindia.com/.
Various steps taken by the Government for increasing the share of natural gas in the energy basket, inter-alia, include expansion of National Gas Grid Pipeline, expansion of City Gas Distribution (CGD) network, setting up of Liquefied Natural Gas (LNG) Terminals, allocation of domestic gas to Compressed Natural Gas (Transport), Piped Natural Gas (Domestic) CNG (T), PNG (D) on priority, allowing marketing and pricing freedom with a ceiling price to gas produced from high pressure, high temperature areas, deep water and ultra-deep water and from coal seams, Sustainable Alternative Towards Affordable Transportation (SATAT) initiative to promote Bio-CNG among others https://www.bseindia.com/.
He also updated members on steps by the Government to reduce country’s dependence on crude oil imports https://sbi.com.in/.
Various measures taken to reduce the dependency on imported crude oil and to promote domestic production of oil and gas which inter alia include:
i. Policy under Production Sharing Contract (PSC) regime for early monetization of hydrocarbon discoveries, 2014.
ii. Discovered Small Field Policy, 2015.
iii. Hydrocarbon Exploration and Licensing Policy (HELP), 2016.
iv. Policy for Extension of PSCs, 2016 and 2017.
v. Policy for early monetization of Coal Bed Methane, 2017.
vi. Setting up of National Data Repository, 2017.
vii. Appraisal of Un-appraised areas in Sedimentary Basins under National Seismic Programme, 2017.
viii. Policy framework for extension of PSCs for Discovered Fields and Exploration Blocks under Pre-New Exploration Licensing Policy (Pre-NELP), 2016 and 2017.
ix. Policy to Promote and Incentivize Enhanced Recovery Methods for Oil and Gas, 2018.
x. Policy Framework for exploration and exploitation of Unconventional Hydrocarbons under Existing Production Sharing Contracts (PSCs), Coal Bed Methane (CBM) Contracts and Nomination Fields, 2018 https://www.sgx.com/.
xi. Natural Gas Marketing Reforms, 2020 http://deutsche-boerse.com.
xii. Lower Royalty Rates, Zero Revenue Share (till Windfall Gain) and no drilling commitment in Phase-I in OALP Blocks under Category II and III basins to attract bidders.
xiii. Release of about 1 million sq km ‘No-Go’ area in offshore which were earlier blocked for exploration for decades.
Various steps have also been taken by the Government and Public Sector Undertaking (PSUs) Oil Marketing Companies (OMCs) to address issues related to fuel pricing, the impact of global crude oil prices and to mitigate the burden on consumers which, inter-alia, include:
i. Reduction of Central Excise duty by the Central Government by a total of Rs.13/litre and Rs.16/litre on petrol and diesel respectively in two tranches in November 2021 and May 2022, which was fully passed on to consumers. Some State Governments also reduced VAT rates to provide relief to citizens. In March, 2024, OMCs also reduced the retail prices of petrol and diesel by Rs.2 per litre each, across the country https://sbi.com.in/.
ii. Insulating common citizens from high international prices by diversifying the crude import basket, invoking the provisions of Universal Service Obligation to ensure availability of petrol & diesel in domestic market, increasing the blending of ethanol in petrol, etc.
iii. Intra-state freight rationalisation by PSU OMCs which has benefitted consumers located at remote areas within the states. This initiative has also reduced the difference between the maximum and minimum retail prices of Petrol or Diesel within a state.
iv. Subsidized domestic LPG cylinder made available to more than 10.33 crore PM Ujjwala Yojana beneficiaries, across the country. A few State Governments are also providing some additional subsidy on LPG refills and bearing the additional cost from their respective budgets.
Oil and Gas PSUs have already announced their target dates for Net Zero status and developed plans for the same. To address environmental concerns and achieving country’s net-zero emissions target they are adopting several methods to decarbonize their operations and value chain which, inter alia, include introduction of cleaner and alternate fuels; such as leapfrogging from Bharat Stage (BS) IV to BS VI fuel norms; adoption of Biofuels e.g. Ethanol Blending, Compressed Bio Gas (CBG) and Biodiesel, promotion of cleaner production processes; promoting gas based economy, promoting energy efficiency and conservation practices, production and utilisaton of Green Hydrogen, installation of Electric Vehicle (EV) charging infrastructure, etc.
Over the last 10 years, Ethanol blending in Petrol by public sector OMCs has helped reduce approximately 578 lakh metric tonne of CO2 emissions. Government has also notified the “Pradhan Mantri JI-VAN (Jaiv Indhan – Vatavaran Anukool Fasal Awashesh Nivaran) Yojana”, to provide financial support for integrated bio-ethanol projects aimed at setting up advanced Biofuel projects in the country using lignocellulosic biomass and other renewable feedstock, said the Minister. Fiinews.com
