February 15, 2020
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‘Any Country Will Have To Pay For Exploration’

Ahead of the Cabinet decision on gas pricing, the petroleum minister spoke to Outlook

‘Any Country Will Have To Pay For Exploration’
‘Any Country Will Have To Pay For Exploration’

Ahead of the Cabinet decision on gas pricing, petroleum minister Veerappa Moily spoke to Lola Nayar. Excerpts:  

On import lobbies influencing decisions: It is a question of understanding which for­ces are prevailing. Everywhere, there is obstruction. We have to take bold decisions. If we don’t take exploration forward, our import dependence would go up. We are importing gas at $14-15 per million British thermal unit. Domestic gas is available at $4.2. Someone is making good profit.

On the impact of the higher gas price: Currently, power and fertiliser sectors are not getting adequate gas. In fact, more than 26-30 per cent of the gas-based power plants are closed as gas is not available. Fertiliser companies are also importing gas at triple the cost.

On allegations of corporate lobbies: From 1999, we have been thinking about giving market prices as promised under the New Expl­oration Licensing Policy (NELP) but we have not implemented it. It is only after consulting all ministries concerned that the proposal was finalised. If any of my critics have good suggestions, they can give it to me.

On why India is opting for steep gas prices: Any country will have to pay for work done by exploration companies. Around 70 per cent is in public sector but we cannot depend only on the public sector. If resources are available, I can give the cheapest price. But you don’t even allow companies to explore. If you do, you will have to give the price, whether public or private.

On whether a higher gas price will reverse the drop in production: We are going strictly by the Rangarajan committee’s formula. We have asked the Vijay Kelkar committee to prepare a roadmap on the price methodology. And we will take appropriate decisions in the best interest of the nation.

On the status of ril’s arbitration case: It’s still under arbitration. We don’t interfere. It’s for the arbitrator to decide. The arbitration is on, I think.

On government action to control drop in gas production from KG Basin: That has to be exa­­mined. Whether the drop in production is because of the contractor’s fault or due to non-availability of gas.

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