Profile of oil industry and fuel saving tips
- Part 1 -

SI Singh *

A Petrol pump in Imphal on July 20 2013 :: Pix - Deepak Oinam

Listed below are a few of the main points brought out by the Ministry of Petroleum in its annual Profile Report.

1. OIL AND GAS SCENARIO IN INDIA

· The actual crude oil production in 2014-15 is about 37.46 million metric tonne (MMT), with is about 0.85% lower than the previous year's crude oil production of 37.78 MMT. The marginal decrease in crude oil production is mainly due to lower crude oil production by ONGC, OIL and Private /JV than the previous year due to ageing and matured fields.

· The average natural gas production in the year 2014-15 is about 92.2 Million Standard Cubic Meter per day (MMSCMD) as against the natural gas production of 97 MMSCMD in 2013-14. The lower gas production in 2014-15 is primarily due to other ageing and matured fields and less gas production in KG-DWN-98/3 (KG-D6) block in East Coast under PSC (Production Sharing Contract) regime.

2. Measures Taken to enhance Oil & Gas Production

In order to accelerate the pace of exploration and production of oil and gas in the country, the Government has taken various policy initiatives which are as under:
· Government has approved Marginal Field Policy for monetization of 69 discoveries.
· Appraisal of about 1.5 million sq. km un-appraised area of the Indian Sedimentary Basins.
· Re-assessment of Hydrocarbon Resources.
· Setting up of National Data Repository.
· Policy for exploration and exploitation of Shale Gas/Shale Oil resources by NOCs under the Nomination Regime.
· Policy for exploration in the Mining Lease (ML) areas after the expiry of exploration period.
· Offering of exploration blocks through bidding round.
· Policy on Non–exclusive Multi-client Speculative Survey for assessment of unexplored sedimentary basins.
· Policy frame work for relaxations, extensions and clarifications at the development and production stage under the PSC regime for early monetization of hydrocarbon discoveries.

3. Developments in the Downstream Sector in 2014-15

· India imports around 84% of its crude oil requirement; hence international oil prices play a decisive role in the domestic pricing of petroleum products. The average price of Indian Basket crude oil was $105.52/bbl. During 2013-14. However, the price of crude oil and petroleum products in the international markets started sliding after July 2014 and the average price of Indian basket crude oil during 2014-15 was $84.16. The downward trend in their international prices has been continued in 2015-16. The average price of Indian basket crude oil in 2015-16 is $ 51.83/bbl. (up to 16.12.2015).

· The Government has made the prices of Petrol and Diesel market determined effective 26.06.2010 and 19.10.2014 respectively. Since then, the Public Sector Oil Marketing Companies (OMCs) take appropriate decision on pricing of Petrol and Diesel in line with the international market and other market conditions. In order to protect the domestic consumers from the impact of fluctuation in the oil prices in the international market, the Government continues to modulate the Retail Selling Prices (RSPs) of PDS Kerosene and Subsidized Domestic LPG (up to 12 cylinder per annum to each consumer) and the prices of these products have not been revised in line with the prices in the international market, resulting in incurrence of under-recovery to the Public Sector Oil Marketing Companies (OMCs) on sale of these products.

· After launch of the modified DBTL (PAHAL) scheme, its consumers get the LPG cylinders at market price and receive LPG subsidy directly into their bank accounts.

4. RECENT DEVELOPMENTS IN DOWNSTREAM SECTOR (2015 – 16)

The Government has provided a fixed fiscal subsidy of Rs.18 per kg under the Direct Benefit Transfer for Domestic LPG during April – October, 2015 and Rs. 15 per kg for the period November, 2015 onwards. Also, the Government has approved the budgetary support for PDS Kerosene under recovery for financial year 2015-16 at a rate of Rs. 12 per litre and the remaining under-recovery will be borne by the upstream oil companies.

5. REFINING CAPACITY

· Out of 22 Refineries operating in the country, 17 are in public sector, 3 are in private sector and 2 are in joint Venture of Public Sector. Out of 17 Public Sector refineries, 8 refineries are owned by Indian Oil Corporation Limited (IOCL), 2 refineries each by Chennai Petroleum Corporation Ltd.(CPCL), ( a subsidiary of IOCL), Hindustan Petroleum Corporation Ltd.(HPCL), Bharat Petroleum Corporation Limited (BPCL) and one refinery each by oil & Natural Gas Corporation Ltd.(ONGC), Numaligarh Refinery Limited (A subsidiary of BPCL) and Mangalore Refinery and Petrochemicals Limited. The private sector refineries belong to Reliance Industries Ltd. and Essar Oil Limited. BPCL and Oman Oil Company have a joint venture refinery at Bina. HPCL and Mittal Energy Investments Pvt. Ltd.have a joint venture at Bhatinda.

6. INSTALLED CAPACITY

Out of total refining capacity of 215.066 MMT as on 01.11.2013, 120.066 MMT is in the public sector. 15 MMT in Joint Venture and balance 80 MMT is in the private sector. The Country is not only self sufficient in the refining capacity for its domestic consumption but also exports petroleum products substantially.

7. AUTO FUEL VISION & POLICY – 2025

The Ministry had constituted an Expert Committee on 19.12.2012 under the chairmanship of Dr. Saumitra Chaudhary, Member, Planning Commission for drafting the Auto Fuel Vision & Policy, 2015. The Committee has inter-alia been requested to recommended roadmap for Auto Fuel quality till 2025 for the country. The Committee has submitted its report on 02.05.2014. As per recommendations of the Committee, Ministry has notified vide letter dated 19.1.2015 a schedule for supply of BS IV fuels in the entire country by 1.4.2017 in a phased manner. Further, Ministry has instructed OMCs to prepare for introduction of BS-VI fuels w.e.f. 2020.

8. SAHAJ – Online new connection ('e-SV')

· The Oil Marketing Companies have launched the facility of release of LPG connection with online payment and issuance of 'e-SV' under the Digital India Initiative and the facility has been extended to PAN India in a phased manner.

· 'e-SV' is the electronic subscription voucher which has the details of number of cylinders and pressure regulator loaned to the consumer against the security deposit. This document is emailed to the customer upon release of LPG connection online.

· The new age consumer looks for a hassle free experience in all types of transactions. Keeping this mind and in line with the continuing effort of Oil Marketing Companies (OMCs) to bring transparency in the supply and distribution of LPG the initiative was undertaken. This initiative would also eliminate multiple visits to the distributor's showroom by the prospective consumers for completing formalities and problems arising out of them. It will also cut down on the time taken for release of connection. As on 1.12.2015, 162098 new connections have been released through Sahaj ('e-SV').

· 'PAHAL' (Pratyaksh Hasthantarit Labh) is world largest Direct Benefit Transfer scheme implemented by Ministry of Petroleum and Natural Gas, Government of India. This scheme was initially launched on 15.11.2014 covering 54 districts and subsequently, extended to cover all districts from 01.01.2015. The objective of the scheme is to bring down subsidy outgo from the exchequer by effectively preventing diversion of subsidized LPG and to evolve suitable mechanism to encourage subsidy savings.

· Through the 'PAHAL', the subsidy given to consumer of the LPG is transferred to the registered account of the consumer. Here, the consumers purchase the LPG refills at market price and the subsidy is transferred to their account. The scheme received overwhelming response from the consumers evident from the fact that more than 14.72 crore consumers are registered to avail the subsidy as on 17.12.2015. So far, nearly 23,000 crore subsidy has been transferred to the accounts. Implementation of 'PAHAL' has resulted in targeting the subsidy transfer to the right consumer and also, helped in diversion of subsidized LPG. · 'PAHAL' scheme has been adjudged as World's largest Direct Benefit Transfer Scheme by the Guinness Book of record.

To be continued ...