The Ministry of Petroleum & Natural Gas is hopeful of resolving issues relating to taxation of petroleum products with the Finance Ministry in a manner that would not affect the investor sentiment for the bidding process of the seventh round of New Exploration Licensing Policy (NELP VII), said Mr Murli Deora, Minister of Petroleum and Natural Gas.
He was speaking to newspersons after inaugurating the two-day fifth Asia Gas Partnership Summit, jointly organised by GAIL (India) Ltd and FICCI. The last date for receipt of investor bids is April 25, 2008, and we are hopeful that the issues would be resolved before that, he said.
On whether the issue was affecting the investor sentiments and responses for NELP VII, the Petroleum Secretary, Mr M.S. Srinivasan, said experience shows that 85-90 per cent of the responses come in during the last two days of the deadline for the receipt of exploration bids. A clear picture would emerge only then, he said.
Regarding the issuance of the balance oil bonds of the last fiscal year to the public sector oil marketing companies (OMCs), Mr Deora said, the Cabinet Committee has decided that the Finance Ministry will determine the quantum of bonds to be issued in consultation with the Ministry of Petroleum & Natural Gas. The Petroleum Minister is likely to meet the Finance Minister, Mr P. Chidambaram, soon on the issue. The OMCs are currently losing about Rs 450 crore a day on sale of four petroleum products.
The PSU OMCs Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation are likely to see doubling of revenue loss on sale of petrol, diesel, domestic LPG, and PDS kerosene to Rs 150,000 crore this fiscal. At present, the Government compensates 42.7 per cent of the total under-realisation suffered by the OMCs on selling products below the cost price through issue of oil bonds. The PSU OMCs together lost Rs 77,304.50 crore in 2007-08.
The Petroleum Minister said that he would be travelling to Islamabad next week for vital discussions on the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline. The TAPI meeting would be held on April 23 and 24, which will be followed up with one day bilateral talks with the Pakistani authorities on the Iran-Pakistan-India (IPI) pipeline. There are some issues such as the charges to be levied by Pakistan for transit fees, but I am optimistic that we would be able to resolve them, he added.
The Minister said a technical team from India would be leaving for Islamabad on Tuesday to lay the groundwork for the discussions on the pipeline. While a broad understanding has been reached on the transportation tariff payable to Pakistan for bringing the gas via the pipeline passing through that country, the issue of transit fee to be paid to Pakistan for allowing the passage of gas was still pending.
Earlier, speaking at the inaugural session, the Petroleum Secretary said the policy on utilisation of natural gas should primarily be determined by considerations of national security, food security and energy security.
Mr Srinivasan said pricing was a key issue in the utilisation of gas. If the gas sector is to grow globally and locally, it is imperative to make it worthwhile for the producers and the users of gas as substitute fuel.