A core group of ministers on Wednesday held inconclusive deliberations on a proposal to raise fuel prices, necessitated by a spike in global crude prices that threatens to spawn an oil import crisis.
The Energy Co-ordination Committee, headed by Prime Minister Manmohan Singh, would meet on Tuesday with gas pricing, gas sourcing and gas allocation as the main topics on the agenda, an official source said.
Crude oil prices in July last year rose to a historic high of $147 and then plumetted to four-year low of $37 per barrel, all in just four months time. The minister said the global financial crisis which was the primary reason for the slump in international oil prices, has forced India to revise growth targets.
Concerned over the fuel shortages and petrol pumps running dry, the government said on Friday it would deploy central forces to ensure supply lines are not dried due to the ongoing strike by oil sector executives. "The government will deploy central forces wherever necessary," petroleum secretary R S Pandey told reporters even as petroleum minister Murli Deora met Prime Minister Manmohan Singh to brief him about the strike by officers of oil PSUs.
The strike by the oil company executives under the umbrella of the Oil Sector Officers Association has brought the country to a grinding halt with over 90 per cent of petrol pumps across the country running dry.
The Oil Sector Officers Association, which claims to represent executives at 14 state-run firms, is protesting against a pay increase smaller than it had demanded.
Chidambaram met petroleum secretary R S Pandey on Sunday morning to keep himself posted about the issues regarding the indefinite strike call given by oil PSU executives from January 7, sources said. Sources said Chidambaram told Pandey that the group may need three to four meetings to form its view and the first in the series has been scheduled for January 7 evening.
Petroleum Minister Murli Deora has sought reconstitution of an empowered group of ministers to decide on allocation of gas from RIL-operated KG-D6 fields to new customers. Deora, who met T K A Nair, principal secretary to the prime minister on Sunday, has formally written to the Cabinet secretary for reconstitution of the eGoM on the lines of the previous ministerial group headed by the then External Affairs Minister Pranab Mukherjee.
"I would say there was a good response from the people (we met today), and something substantial can come out of it. But I cannot give you the names or details of our meeting," Deora, when asked to give a sense of the meeting by rediff.com, said.
Replying to a calling-attention motion in Rajya Sabha, oil minister Murli Deora said the $4.2 per million British thermal unit price fixed for gas produced from KG-D6 fields of RIL was lower than the average of $5.51 per mmBtu charged by UK's BG-led consortium for Panna/Mukta and Tapti gas. It was also lower than the $4.3 per mmBtu price of gas produced from Cairn's Ravva Satellite fields and $4.75 per mmBtu for the UK firm's Lakshmi fields.
The government may soon raise prices of natural gas produced by state-owned ONGC and Oil India by as much as 30 per cent, Petroleum Secretary S Sundareshan said on Monday.
"I understand your pain," Singh, who rushed to the city from Delhi, said during his meeting with some of those injured in the terror attacks that have left 125 dead
Replaying to a question in the Rajya Sabha on Monday, Deora said there are some outstanding issues including finalization of the gas price with Iran.
The board of ONGC has approved its 30 per cent share of the $2.431 billion revised field development cost proposed by Cairn India for the Block RJ-ON-90/1, petroleum minister Murli Deora informed the Rajya Sabha on Monday. ONGC will invest $729.43 million.
Petroleum Minister Murli Deora and Chairman of Oil and Natural Gas Corporation R S Sharma are planning a visit to Russia in the first week of next month, hoping the Russian government would give its assent for the proposed acquisition of UK-listed Imperial Energy.
Highly placed sources said Oil Minister Murli Deora took exception to Menon's proposals during a meeting of the Federation of Indian Airlines and Civil Aviation Minister Praful Patel to resolve the crisis arising out of mounting fuel bill arrears. "There should not be any layoffs. Why are you raising it now," sources quoted Deora as telling Menon.
The government on Thursday rejected demands for a roll back in the hike in petrol and diesel prices, saying it would favourably consider the issue only when global crude prices come down.
"You will have to wait for that," Petroleum Minister Murli Deora told reporters. International crude oil prices are ruling at $74 per barrel on Tuesday.
Union Petroleum Minister disclosed the decision on fuel prices will be taken on Jan 17, in the GoM meet.
Petroleum Secretary R S Pandey separately pointed out that the airline had defaulted on payment of fuel bills to oil companies and owed them Rs 259 crore (Rs 2.59 billion). The airline, which is battling to survive the downturn in the industry, has handed out the pink slip to 1,900 employees, mostly cabin crew - which it expected to result in savings of $1 million a month.
Dabhol is part of Ratnagiri Gas and Power Pvt Ltd.
A prime minister-appointed expert group, headed by Kirit Parikh, suggested on Wednesday freeing petrol and diesel prices and suggested raising liquid petroleum gas rates by a steep Rs 100 per cylinder and kerosene by Rs 6 a litre.
Finance minister Pranab Mukherjee is believed to be in favour of giving state-run oil firms freedom to fix price of petrol and diesel in step with cost, as he feels the current moderate global oil rates may be the last window India has to deregulate fuel pricing.
Petroleum Minister Murli Deora and Minister of State for Petroleum Jitin Prasada took charge on Friday.
The drop in international oil prices has resulted in revenue loss of Indian Oil, Bharat Petroleum and Hindustan Petroleum dip to Rs 400 crore per day from Rs 450 crore (Rs 4.5 billion) a fortnight back. The basket of crude oil India buys averaged $111.09 a barrel in the second fortnight of August as compared with $117.37 per barrel in the first fortnight of the month.
India, which imports 73 per cent of its oil needs, has been hit by the surge in international crude oil prices that touched $96 a barrel last week. State-run fuel retailers Indian Oil, Bharat Petroleum and Hindustan Petroleum are currently losing Rs 240 crore (Rs 2.4 billion) per day on selling petrol, diesel, domestic LPG and PDS kerosene as the government has not allowed them to raise retail prices in line with the surge in cost.
Taking Indo-Chinese co-operation in the oil sector a step forward, the country's biggest oil refiner and retailer, Indian Oil Corporation, has signed a memorandum of understanding with integrated Chinese national oil company Sinopec.
The gas row between the Ambani brothers had its echo in the Lok Sabha on Thursday with Samajwadi Party chief Mulayam Singh Yadav making a strong plea for gas from Reliance at cheaper rates for state-owned NTPC, a plea also being used by the Anil Ambani group.
Though the international crude prices were going up, the United Progressive Alliance government's approach was that the subsidy on petroleum products should continue as in the case of food and fertilisers.
Petroleum Minister Murli Deora after a meeting with his Iranian counterpart Gholam Hosein Nozari for talks on the $7.5 billion Iran-Pakistan-India pipeline project said there were 'some minor problems' which have been sorted out.
India has asked oil cartel Organization of the Petroleum Exporting Countries to raise crude oil production to stem the relentless rise in international oil prices that have threatened to derail import dependent economies such as India.
Black clouds of smoke were billowing from the tanks, and could be seen at least from a distance of ten kms on the Jaipur-Tonk highway. District Collector Kuldeep Ranka told PTI that a charred body was clearly visible near the IOC tank premises, but it was not possible to reach and recover it.
Adversity often brings out the best in companies, even state-owned ones. Faced with a bloated fuel bill, companies are busy devising new ways to control costs. These range from cut in travel to shift to cheaper fuels and even reduced recruitment. Power equipment maker Bharat Heavy Electricals Ltd has a brand new strategy in place -- it will set up onsite fabrication units rather than transport equipment over long distances.
A decision on raising retail fuel prices and partly compensating revenue losses of oil firms will be taken by Saturday (May 31), even as Prime Minister Manmohan Singh on Thursday assessed the problems caused by the spike in crude prices.
For the second time in as many months, the Government on Wednesday night cut petrol price by Rs 5 a litre and diesel by Rs 2 per litre, while the domestic LPG rate was also slashed by as much as Rs 25 per cylinder.
India's Petroleum Minister Murli Deora and his Pakistani counterpart Khwaja Asif said they had made "significant progress" in bilateral talks on the India-Pakistan-Iran gas pipeline and were determined to go ahead with it despite reported reservations of the US on the project. They said the two sides had reached a broad agreement on principles for deciding the transportation tariff and transit fee, two key issues that had held up the finalisation of the 2,600-km pipeline.
Murli Deora, Minister for Petroleum and Natural Gas, will be leaving for Pakistan on Tuesday. India and Pakistan's relation will get unprecedented boost if talks on Turkmenistan-Afghanistan-Pakistan-India natural gas project proceeds on a fast track, said a high-level source in the Indian Ministry of Petroleum and Natural Gas. The biggest issue in realising the TAPI pipeline project is the issue of security through Afghanistan.
GAIL has already been appointed as the nodal agency for the pipeline in India.
Deora's visit assumes importance in view of Musharraf's proposals to China and China's quest for shorter, safer and commercially viable routes for importing gas and oil.
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