Policy
Retail Price Reduction Of Petrol, Diesel Disappoints The Public
more...


India Opens Up Almost All No-Go Areas For Oil & Gas Exploration
more...


Indian Companies Turning To Ethane As Petrochemical Feedstock
more...


PNGRB Working On Roadmap For Hydrogen Transportation
more...


India’s Demand For Transportation Fuels Continues To Grow Ahead Of Rest Of The World
more...

Regulation
India Dilutes Its Push For Rupee Payment For Crude Import
more...


With 5 MTPA FSRU: India’s LNG Regassification Terminal Sector To Enter A New Phase
more...


Oil India Hires Dolphin Drilling For Its Andmans Drilling Program
more...


Did Tesla Influence India’s E-Vehicle Policy?
more...

Alternative Energy / Fuel
The Promise And Potential Of Hydrogen
more...

New Projects
Foundation Stone For Petrochemical Complex Laid
more...


PM Modi Inaugurates 2 Flagship Pipeline Projects Of OIL
more...

Market Watch
Ethanol 100 Fuel Launched By Petroleum Minister Hardeep Singh Puri
more...

Companies
Asian Energy Services Limited
more...


Bharat Petroleum Inks Deal With BP To Buy US Crude
more...


NRL’s Liaison Office Inaugurated In Dhaka
more...

Press Release [FREE Access]
Petro Intelligence » Regulatory Board In Its Death Throes

By R. Sasankan

“Ah Love! could thou and I with Fate conspire
To grasp this sorry Scheme of Things entire,
Would not we shatter it to bits -- and then
Re-mould it nearer to the Heart's Desire!”
– Omar Khayyam, Persian poet

Narendra ModiKarl Marx visualised a stage where the state would simply wither away. This was the ultimate phase of his ideal socialist state. But there is a massive gap between precept and practice – and the so-called practitioners of his creed have proved Marx wrong.

Instead of the state withering or weakening its hold, they have become Leviathans – not much different from Thomas Hobbes’ social contract theory which posited the idea that civil war could only be avoided by an absolute sovereign ruling a Commonwealth that he termed the Leviathan in his book that bore the same title. Institutions that were once perceived to be useful to society have been either undermined or dismantled, especially in countries like Russia and China which experimented with Communism.

Regulatory bodies underpin the rule of law in most countries. All industrialised economies, except Russia and China, have institutionalised regulatory bodies. India started the process of setting up regulatory bodies about two decades ago but went about creating them in the wrong way. The government ensured that these regulatory bodies did not become so powerful that their writ would undermine the powers of the bureaucracy and the politicians. Thus, regulatory bodies became a parking lot for superannuated bureaucrDharmendra Pradhanats. This coupled with the traditional knack of picking up the wrong people for responsible jobs prevented these regulatory bodies from having the desired impact.

The cash-rich petroleum sector has been doing reasonably well notwithstanding the interference of the political party in power. The petroleum sector was almost totally dominated by the public sector companies since the days of Mrs Indira Gandhi but, with the entry of companies such as Reliance and Essar in the downstream sector and foreign companies in the E&P, the government came under pressure to set up regulators. The bureaucracy blocked it for the upstream sector by manipulating the creation of a technical body called the Directorate General of Hydrocarbons (DGH) which royally messed things up. DGH, which is part of the Ministry of PetrolL Mansingheum and Natural Gas, only has an advisory role. But even in that limited role, it has managed to play havoc in the E&P sector.

The government looked sincere in setting up a regulator for the downstream sector when it enacted an Act to create a Petroleum and Natural Gas Regulatory Board (PNGRB). But it again bungled while drafting the provisions of the Act and selecting the team. The PNGRB is now in its death throes. In the absence of a miracle, its funeral can be expected very shortly.

None has criticised the Modi government for the present state of the PNGRB and rightly so. The PNGRB never played a useful role in its decade-long existence. Almost all its decisions that were challenged in courts of law have been struck down. In desperation, the Board had advertised for consultants to redraft the regulations but it is not in a position to award the job to anyone.

Surprisingly, the Board which lacks a quorum has protested against the government move to permit GAIL to set up CNG units along the Jagdishpur-Haldia gas pipeline route. There is merit in its protest becaV.K. Sibaluse under the PNGRB Act, it is the only one empowered to authorise gas pipelines and CGD units. Even those CGD units and pipelines created before PNGRB was established were duty bound to seek regularisation from PNGRB.

The Modi government has not commented on the state of affairs in PNGRB. Not has it reacted to the regulator’s protest against the blanket permission given to GAIL to set up CGD units. The PNGRB has been without a chairman for the last two years. Of its total strength of five members, it is has only one now. The government probably believes that the country can do without a downstream regulator, a perception shared by many within the industry. The government’s silence has frustrated the ambitions of quite a few superannuated bureaucrats who have been lobbying for the post of chairman.

B. MohantyBut the question is why the government is allowing the space occupied by PNGRB to be wasted. All its employees are on deputation from PSUs and they will have no problem in going back. The government can save on rent for the space it now occupies by shifting the only surviving member to a room elsewhere. He is a genuine expert in petroleum matters and his talents can be utilised during the remaining period of his tenure elsewhere.

The government will certainly come under pressure to create an effective regulator if its plan to set up a mega oil behemoth by merging all the oil and gas companies becomes a reality. On present reckoning, this cannot happen in the next two or three years. As and when it happens, the PNGRB Act itself will have to be changed drastically to create an effective regulatory body. Perhaps, the Modi government is waiting for such an opportunity to recast and remould PNGRB. The strategy is not to create sound and fury by smashing it to bits but to allow its slow death so that a powerful regulator can be created later. In Modi’s scheme, the regulator ought not to be reduced to a weak body of retired bandicoots.



To download the latest issue 'Volume 30 Issue 24 - March 25, 2024', click here
Petro Intelligence [FREE Access]
Greatest Uncertainty Faced By The International Oil Industry
more...

Calling The Bluff On India Busting Russian Sanctions
more...

MRPL: Asserting Its Bragging Rights
more...

Halving Of OMCs Budget And Unchanging Petrol And Diesel Prices: Are They Connected?
more...

Foreign Investment
AESL Wins Significant Contract For Py3 Field Installation Project
more...

Overseas Investment
ONGC Videsh To Get Some Oil From Venezuela In Lieu Of $600 Million Dividend
more...

Gas Scene
Domestic Natural Gas Scene Presents A Bright Picture In February 2024
more...


Sector-wise Consumption Of Natural Gas
more...


Higher LNG Imports Elevate Natural Gas Consumption Level in January 2024
more...


Near Total LPG Penetration Achieved
more...


India’s Fluctuating Gas Import Dependency
more...


Gas Transportation Major GAIL’s Physical Performance
more...


Growing CGD Sales In India
more...


Domestic Natural Gas Scene In December: Targets Elude, Production, Consumption More
more...


India’s LNG Import: Import Quantity Shrinks As Prices Go Up
more...


India’s LNG Import Picks Up As Market Prices Fall
more...


Sectoral Consumption Of Natural Gas
more...


Production Targets Confuse Domestic Natural Gas Scene In November
more...


Shale Gas & Oil Eluding India
more...


Domestic Natural Gas Scene in October 2023
more...


Natural Gas Price Trends: Global And Domestic
more...

Data Section
Monthly Upstream Data
Monthly Downstream Data
Historical database
Data Archives
Special Database
Import and Export of petroleum products
more...


Analysis Of Type Of Crude Oil Processed By Refineries During April-February 2023-2024
more...


Crude Import Down In February, Russian Crude Share In Cumulative Import Still Strong
more...


Sharp Reduction In GRMs Of Indian Refineries
more...


Oil Marketing Company BPCL’s Refineries Performing Remarkably Well
more...


Oil India’s 3 Major Overseas Projects
more...


BPCL Finalises Strategic Aspirations For The Next Five Years
more...


Refining Margins In Global Hubs Show Mixed Trends
more...


Global Oil Demand Growth Forecast For 2024 Remains Unchanged
more...


Indian Crude Basket Prices In February 2024
more...


Petro chemical Sector Ensures Stability In Naphtha Demand Growth
more...


Banned Pet Coke In Great Demand in India
more...


India’s Ambitious Ethanol Blending With Petrol Program. New Confidence Visible
more...


When Will Kerosene Be Out of Indian Households?
more...


What Has Been The Consumption Trend of Petroleum Products During Current FY?
more...


Region wise Power Supplied vs requirement for January 2024
more...


Impressive Growth In Petroleum Products Consumption
more...

Tenders [FREE Access]
IOC
more...