Ministry of Petroleum Current Affairs - 2020

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First Meeting of Consultative Committee of Ministry of Petroleum

The first meeting of Consultative Committee of Ministry of Petroleum was chaired by the Minister of Petroleum Shri Dharmendra Pradhan.

Highlights of the meet

The committee announced that Government of India is working towards a transformative change in energy sector. It is planning to increase share of Natural gas in the energy sector from 6.2% to 15% by 2030. The committee has given a strong policy thrust to support Natural Gas enabling infrastructure.

Also, the contribution of biofuels and its usage are to be increased. The committee pointed out already existed government measures to increase the use of biofuels

Government measures of Biofuels

GoI introduced Ethanol Blended Programme to reduce dependency of oi imports, address environmental concerns and to boost agriculture sector. Government re-introduced administered price mechanism, amended Industries (Development and Regulation) act, 1951, reduced GST rates of ethanol from 18% to 5%.

Current Scenario

Today in India, oil public sector units like Indian Oil Corporation are establishing Ethanol bio-refineries. Around 12 such refineries in 11 states are being established. Currently, the biofuels are produced in accordance with National Biofuel Policy, 2018. It targets 5% blending of biodiesel in diesel by 2030. Under SATAT (Sustainable Alternative Towards Affordable Transportation), 5000 Compressed Bio Gas Plants are to constructed by 2023. The initiative aims at generating 15 million metric tonnes of biogas per annum

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Price Restriction on locally produced natural gas removed-To Boost Investment

GoI has been reforming the oil and gas sector lately. Steps are being taken to free up pricing of oil and gas sector to scale up oil and gas production and to increase investment in the sector. To achieve this, GoI on November 11, 2019 removed price restriction on locally produced oil and natural gas.

Current Pricing System

The current pricing system of oil and gas is based on the New Exploration Licensing Policy. According to the policy, the producers cannot charge gas from deep sea below government-prescribed ceiling. GoI has fixed this ceiling at 8.43 USD per mmBTU. The ceiling is to be removed under the new regulation.

Significance

Gas producers were critical about this low pricing that affected the investment adversely. Though, the prices seem increasing at initial period, it will get reduced in long term. As more investors compete in the market, the prices will gradually fall after reaching a saturation peak point.

Kelkar Panel

The move was suggested by the Kelkar Panel. The Panel suggested to increase the ceiling gradually and remove it completely to increase the investment.

Kelkar Panel was set up by the Petroleum Ministry to boost domestic production of oil and gas and to help India achieve energy security. It was set up in 2013 under the Finance secretary Vijay Kelkar. The Kelkar Committee submitted its report in 2013

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