Moily, said the price increase would help India bring to production at least 3 Trillion cubic feet of natural gas
Defending the government's decision to double gas prices from next financial year, Oil Minister M Veerappa Moily on Friday said the government could not afford a timid mindset while deciding on issues of national importance.
“We cannot be afraid of the ghosts of 2G, CBI (Central Bureau of Investigation) and CAG (Comptroller and Auditor General). Bureaucracy needs to be operated by giants and not pygmies. We have to destroy bureaucratic delays and focus more on delivery rather than processes,” Moily said while addressing an oil conference here.
Reacting to Communist Party of India leader Gurudas Dasgupta and former Union power secretary E A S Sarma’s public interest suit in the Supreme Court, seeking a rethink on the government’s decision, Moily said: “Dasgupta has the right to approach the court. We have no problem with it. The gas price increase decision was taken in the most transparent manner.”
Last month, the government decided to double natural gas rates to $8.4 per million British thermal units (mBtu) from April 2014. The decision has not gone down well with many as it would lead to sharp increase in in urea and power production costs.
Moily said the price increase would help India bring to production at least 3 trillion cubic feet (tcf) of natural gas. “My point is either produce oil and gas or perish. There is no intermediate way. Over 3 tcf of discovered gas reserves are not being developed as they are not viable at $4.2 per mBtu. Everything has a price and you have to give the price.” Moily said even the Directorate General of Hydrocarbons (DGH), India's upstream regulator, had not approved commercial production from several of the discoveries as they were not viable at current rate of $4.2 per mBtu. “We don't have the giants like Exxon, except BP, coming to India. In future, nobody will come if gas prices are not revised. We are not ready to pay $6.8 per mBtu in India but are importing LNG (liquified petroleum gas) at $17,” he added.
If volumes increase and more investments and latest technologies come into the sector, gas prices may even come down in the future, Moily said. The minister also said he met executives of the state-run oil and gas companies a fortnight ago and asked them to increase their capital expenditure plans. “I would be meeting them again in the next few days to prepare a road map to achieve the same.”
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