The decision to appoint Pandey comes at a time when the United Progressive Alliance's (UPA's) new partner, the Samajwadi Party, has clamoured for a change of guard in the petroleum ministry on the grounds that while public sector oil companies are bleeding, private refiners are reaping "windfall profits".
Petroleum ministry officials said the situation suggested that Srinivasan had been caught in the line of fire. He will hand over charge to Pandey on July 31.
Srinivasan, credited with setting up the long-awaited Petroleum and Natural Gas Regulatory Board and solving the issue of pricing gas from Reliance Industries' deepwater block in the K-G basin, did not comment.
Industry sources said Pandey has no experience of the sector. "We will wait and watch how he handles the ministry. The sector is going through unprecedented challenges," said a top official of an oil company.
As steel secretary, Pandey, a 1972-batch IAS officer of the Nagaland cadre, was successful in implementing the government's price control agenda by convincing the domestic producers to reduce prices, two steel industry representatives said. However, they pointed out that because of this focus on prices, important issues like the inter-ministerial group set up about a year ago to speed up major steel projects in India made negligible progress.
On his part, the incoming secretary is not revealing the action plan for his new role yet, saying: "I am looking forward to go to another sector. I can talk about it only after going there".
The 58-year-old Pandey was secretary in the Ministry of Parliamentary Affairs before he took over as the steel secretary on July 26, 2006. He was also posted in the Department of Education under the human resource development ministry as joint secretary and in the Ministry of Social Justice and Empowerment as director.
In contrast, Srinivasan was special secretary, additional secretary and director in the petroleum ministry before he was appointed to the top post in the ministry.
Pandey, a mathematics and physics graduate, will take over as the petroleum ministry's top-most bureaucrat at a time the oil and gas industry faces many challenges. Oil production from the country's fields are stagnating even as the demand for oil continues to grow at over 12 per cent per year. Record-high crude oil prices are also putting severe strain on the finances of the country's oil marketing companies as prices of fuels they sell continue to be subsidised.