Ministry of Petroleum Current Affairs - 2019
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The Union Government will soon get Cabinet approval for setting up of high-powered think tank under Ministry of Petroleum to look into key issues related to oil and gas sector. Besides, Petroleum Ministry also has send proposal to Union Cabinet for setting up domestic gas trading hub to adopt better mechanism for price discovery of both domestic as well as imported gas.
Internal think tank
The think will give advice on technology, setting up a gas network, attracting more FDI in sector, reducing India’s oil imports by 10%, and developing innovative new models of financing projects. The members of think tank will include ICICI Bank MD and CEO Chanda Kocchar, New Development Bank (NDB) chief K.V. Kamath, former Chairman of 13th Finance Commission Vijay Kelkar, top officials from oil and gas majors from across world and officials from Ministry of Petroleum and Natural Gas.
Domestic gas trading hub
Currently, price of natural gas in country is determined through a government-mandated formula that links the local price to rates prevailing in gas-surplus nations. However, long-term contracts for gas import are linked to crude oil.
Domestic gas trading hub will help to move gradually towards transparent price mechanism determined through gas trading hub. It will help to reaffirming India’s resolve to cut carbon intensity of its GDP and increase gas use in energy mix to 15% from the current 6.5% where India lacks much behind world average of gas use in total energy consumption 24%.
India imports almost 60% of its petroleum requirements. Currently, price of natural gas in country is determined through government-mandated formula that links local price to rates prevailing in gas-surplus nations. However, long-term contracts for import of gas are linked to crude oil.
India is planning to shift towards gas-based economy, reduce greenhouse emissions and cut oil import. Governing is doubling its network of pipelines to transport natural gas to 30,000 km within next three-four years for shifting to gas-based economy.