Rules on oil, gas to be demarcated

The petroleum ministry has changed its stance on creating a regulator for the petroleum sector. Stating that the proposed regulatory framework would differentiate between gas and oil regulation, Petroleum Secretary SC Tripathi today said a Bill for setting up a regulator would be introduced in the next session of Parliament.

"The Bill was drafted to take care of both oil and gas but it was felt that gas regulation should be different from oil's," said Tripathi at an interactive session organised by Assocham here.

He said it had been suggested that the task of regulating gas be given to the power regulator like it was in some countries but this was not possible since electricity was in the concurrent list.

Besides, gas regulation involved issues like making distribution easier and applying the common carrier principle to pipelines, he said.

On the issue of creation of crude oil reserves, the Tripathi said refineries maintained 45 days' of commercial crude oil reserves and that 15 days' of reserves were on high sea. Another 15 days' products were in the pipelines.

Earlier, speaking to reporters, Tripathi said the work on the creation of 5 million tonne strategic reserves would start next year. He said the Expenditure Finance Committee would be meeting shortly to clear the financing of the project. After this, the project would be put up for the clearance of the Cabinet Committee on Economic Affairs.

The government, he said, would not immediately go in for filling the storage if international prices were high. "We do not want to create a situation where prices increased like what happened when it was reported that China was creating strategic reserves."

On the high international oil prices, Tripathi said, "We have had a relatively long era of soft oil prices but now it seems high oil prices have come to stay."