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For reasons right or wrong, the country's oil and gas sector hogged the limelight during calendar year 2007 and witnessed significant developments round the year.
The most noteworthy of them all has been the non-revision of domestic fuel prices (petrol, diesel, LPG and kerosene) despite a sharp uptrend in the global crude oil prices. Union minister for petroleum and natural gas Murli Deora proved himself to be a sound politician in Manmohan Singh's cabinet. In line with his party's directives, Deora pursued a people-friendly policy, where the voters were kept happy by freezing the domestic fuel prices despite global oil prices touching $99 a barrel levels.
Navratna oil PSUs like ONGC, GAIL and Oil India (OIL), despite their unwillingness, were told to share the losses suffered by PSU oil marketing firms like IOC, HPCL and BPCL on account of selling fuel below the market price. "Robbing Peter to pay Paul" is what the UPA government did to keep the voters happy. Whether this could be counted as an achievement of the government can, therefore, be best left to the readers to decide.
Now, for some real-time achievements of the government in the sector. The tremendous growth in the exports of petroleum products during the first seven months of the current fiscal (2007-08) is something that Deora can certainly boast of.
As against the gross exports of $18.6 billion of petroleum products during 2006-07, the gross exports figure for the period April-October 2007 alone touched $14.6 billion. The oil sector in India is also the largest foreign exchange earner, bringing in 17% of the country's foreign exchange. On $48.3 billion of crude imports in 2006-07, 17% amounts to $8.2 billion.
Relaxing the 26% ceiling norms for FDI in government-owned refineries and allowing steel czar LN Mittal pick up a 49% equity in the 9 mtpa Bhatinda refinery project of Hindustan Petroleum (HPCL) were other significant policy decisions taken by the government. Allowing Reliance Industries Ltd (RIL) to turn its 33 mtpa refinery in
Jamnagar into a 100% export-oriented unit was also an important development of the year.
The approval of RIL's gas sales from the country's largest gas field to core sector consumers at $4.21 per mmbtu was yet another major decision taken by the government during the year.
Another feather on Deora's cap during the year has been the launch of the seventh round of the New Exploration and Licensing Policy (NELP-VII), where 57 oil and gas blocks have been offered to national and international players in the oil and gas sector. A revenue projection of around $3.5-4 billion has been made for this round.