Rising international crude prices leave little room to maneuver, while private players are concerned about India’s oil and gas exploration sector
(Photo: Getty Images)
Less than a year has passed since former bureaucrat Hardeep Singh Puri got the additional charge of the crucial petroleum ministry, and it has not been an easy time. With the government’s emphasis on self-reliant India, Puri increasingly took the attention of the ministry to reduce the country’s dependence on imported crude oil by increasing domestic production. India imports about 84 per cent of its crude oil requirement – 212.2 million tonnes in 2021-22 – spending Rs 9.28 lakh crore in the process, double the amount spent in 2020-21.
cover story , challenges ahead
Attracting private investment in oil and gas exploration and production remains a challenge. Last year, only three bids were received in the sixth round of Open Acreage Licensing Policy (OALP) bidding. Eighteen out of 21 blocks were bagged by the public sector ONGC, Oil India Limited, two and Sun Petrochemicals one. Round VII of bidding is currently underway. The petroleum ministry has been the focus for the past several months as fuel prices skyrocketed, first due to the Covid-induced global shortage and then the war in Ukraine. High fuel prices kept inflation in check, prompting the Center to cut excise duty on May 22. This means a revenue loss of Rs 1 lakh crore, but it could cut inflation by 30-40 basis points.
