Oil demand is on rise, says Dharmendra Pradhan

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By Our Correspondent

NEW DELHI/BHUBANESWAR: Union Minister for Petroleum, Natural Gas and Steel,  Dharmendra Pradhan in a written reply in the Lok Sabha on Monday said as per World Energy Outlook 2019 published by International Energy Agency, India’s oil demand in total primary energy is projected to increase from 233 Million tonne of oil equivalent (Mtoe) in 2018 to 305 Mtoe in 2025, whereas China’s oil demand is projected to increase from 593 Mtoe in 2018 to 672 Mtoe in 2025.

Government has taken several steps to enhance exploration & production of oil and gas, give thrust on demand substitution, promote energy efficiency and conservation, capitalize untapped potential on biofuels and alternative fuels/renewables in order to reduce imports of crude oil.

These include a series of initiatives such as Policy for Relaxations, Extensions and Clarifications under Production Sharing Contract (PSC) regime for early monetization of hydrocarbon discoveries, Discovered Small Field Policy, Hydrocarbon Exploration and Licensing Policy,   Policy for early monetization of Coal Bed Methane, Setting up of National Data Repository, Appraisal of Unappraised areas in Sedimentary Basins, Re-assessment of Hydrocarbon Resources, Policy framework to streamline the working of Production Sharing Contracts in Pre-NELP and NELP Blocks, Policy to Promote and Incentivize Enhanced Recovery Methods for Oil and Gas, Policy framework for exploration and exploitation of Unconventional Hydrocarbons under existing Production Sharing Contracts, Coal Bed Methane contracts and Nomination fields.

The Government in February, 2019 approved major reforms in exploration and licensing policy to enhance exploration activities, attract domestic and foreign investment and accelerate domestic production of oil and gas from existing fields.

The policy reforms inter alia aims to  boost exploration activities with greater weightage to work programme, simplified fiscal and contractual terms, bidding of exploration blocks under Category II and III sedimentary basins without any production or revenue sharing to Government, early monetization of discoveries by extending fiscal incentives, incentivizing  gas production including marketing and pricing freedom, induction of latest technology and capital, more functional freedom to National Oil Companies for collaboration and private sector participation for production enhancement methods in nomination fields, streamlining approval processes and promoting ease of doing business including electronic single window mechanism.

Indian Strategic Petroleum Reserve Limited (ISPRL) has already created SPR facilities at 3 locations, namely (i) Vishakhapatnam (1.33 MMT), (ii) Mangaluru (1.5 MMT) and (iii) Padur (2.5 MMT). Government has given ‘in principle’ approval for creation of two additional underground rock cavern SPR facilities with total storage capacity of 6.5 Million Metric Tonne (MMT).

Government is promoting the usage of environment friendly transportation fuel, i.e. CNG by expanding the coverage of City Gas Distribution (CGD) network in the country. Government has also taken a number of initiatives to encourage the use of alternative fuels like ethanol and bio-diesel through Ethanol Blending in Petrol (EBP) Programme and Bio-diesel blending in diesel. Government has formulated a National Bio Fuel Policy 2018 to boost availability of biofuels in country.

Ministry of Petroleum and Natural (MoPNG) Gas vide Resolution dated 08.11.19 revised the guidelines for authorization to market transportation fuels which have been published in the Gazette of India. The revised guidelines would promote ease of doing business and boost private players to invest in retail sector. The said Resolution is available on the website of MoPNG. The main features of the said guidelines are as below :-

 The resolution applies for marketing of only Motor Spirit and High Speed Diesel for “Bulk” and “Retail” business.An entity desirous of seeking authorisation for either retail or bulk must have a minimum net worth of Rs. 250 crore at the time of making application.

In case authorization is required for both retail and bulk, minimum net worth will be Rs.500 crore.Separate applications to be made for retail and Bulk business.For retail authorisation, an entity have to set up at least 100 retail outlets, out of which 5 % should be in the notified remote areas within 5 years of the grant of authorization. An effective mechanism has been prescribed to ensure that the entity deliver on its commitment to set up the ROs in remote areas.An entity is required to deposit prescribed Bank Guarantee amount as a security at the time of grant of authorization in addition to application fee.

In addition to conventional fuels, the authorized entities are required to install facilities for marketing at least one new generation alternate fuels like Compressed Natural Gas (CNG), biofuels, Liquefied Natural Gas (LNG), electric vehicle charging points etc. at their proposed retail outlets (RO) within three years of operationalization of the said outlet subject to the entity complying with various other statutory guidelines.

Oil Public Sector Undertakings (PSUs)/Joint Venture (JV) refineries have plans for capacity addition including investment in greenfield refineries. The refining capacity is expected to increase from 249.4 MMTPA currently, to about 443 MMTPA by 2030.

Government has decided that Bharat Stage-VI (BS-VI) emission standards fuels will be implemented across the country w.e.f. 01.04.2020 and supply of BS-VI fuels in National Capital Territory (NCT) of Delhi has been started w.e.f. 01.04.2018. Government has also started supply of BS-VI auto fuels in 20 Districts of Rajasthan, Uttar Pradesh & Haryana. To meet the incremental demand of petrol and diesel, refineries have capacity expansion/upgradation plan including for supply of BS-VI quality petrol and diesel.

Government has also notified the National Policy on Biofuels-2018 on 8.6.2018. The goal of the Policy is to enable availability of bio fuels to increase blending. An indicative target of 20% blending of ethanol in petrol and 5% blending of biodiesel in diesel is proposed by 2030. The goal is to be achieved by reinforcing ongoing ethanol/biodiesel supplies through increasing domestic production, setting up Second Generation bio refineries, development of new feedstock for biofuels, creating suitable environment for biofuels and its integration with the main fuels etc.

Petroleum & Natural Gas Regulatory Board (PNGRB) is the authority to grant authorization to the entities for the development of City Gas Distribution (CGD) network in Geographical Areas (GAs) as per PNGRB Act, 2006. In order to expand natural gas availability across the country, PNGRB identifies GAs for authorizing the development of CGD network in synchronization with the development of natural gas pipeline connectivity and natural gas availability, added Pradhan.

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