Policy
Crude Oil Prices Begin To Bite
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Farzad-B Field Saga Resembles A Ping-Pong Game
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As Govt. Dithers, Supreme Court Bans Use Of Pet Coke, FO
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India’s Integrated Oil Industry Structure Goes
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Unstated Policy Emerges On Private Sector Defaulters In Petroleum Sector
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Regulation
ONGC To Seek Alliances To Develop New Resource Type
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ONGC’s Sets New Record In Well Completion & Testing
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Land Acquisition For Gas Pipelines Provokes Public Fury
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Largest Petro Products Exporter Is A Major Importer As Well
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Alternative Energy / Fuel
Cabinet Revises Price Of Ethanol For Blending With Petrol
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OMCs To Procure 3130 Million Litres Of Ethanol
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New Projects
RIL Awards Contract To McDermott
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AG&P Develops India LNG Terminal At Karaikal
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Kenya Signs Agreement For Crude Oil Pipeline Study
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IOC To Augment Pipeline Capacity
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Market Watch
Market Survey On Retail Demand For Petrol And Diesel
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Companies
FUGRO N.V.
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Fugro Starts Seismic Offshore India
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ONGC Finds Oil, Gas In Offshore KG Basin
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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 24 Issue 15 - November 10th 2017', click here
Petro Intelligence [FREE Access]
IOC Set To Undermine GAIL’s Role n Gas Business
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Fracas Over Farzad: Need To Sideline The Hotheads
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Why Demand Projections Are All Gas
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Refinery Plan Masks Ego Battles
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Foreign Investment
Kuwait Company Proposes A Refinery In India
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Oilex Seeks Extension Of PSCs
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Overseas Investment
Indian PSUs Looking For Gas Assets Overseas
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Gas Scene
Update: CGD Factsheet as of September 2017
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Natural Gas Share in Prime Energy Mix
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Domestic Gas Price (November 2014 -March 2015 to October 2017 - March 2018)
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Source-Wise LNG Imports In September 2017
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Sector-wise gas consumption of domestic gas and RLNG (July 2017)
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BPCL upstream blocks and assets in India and overseas
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Domestic Natural Gas Scene : September 2017
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ONGC Asset-wise gas flaring in FY 2016-17
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Source-wise LNG Imports for August 2017
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Coal Bed Methane (CBM) gas development in India
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Gas Pipeline Under Execution / Construction as on 31st March, 2017
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LNG Imports In July 2017
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Domestic natural gas price and gas price ceiling
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SAGE-EIL Presentation: Middle East to India Deepwater Pipeline
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ONGC Gas Flaring for FY 2016-17
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Petronet LNG Ltd looks set to expand its wings
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Source-Wise Imports of LNG In June 2017
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Sector-wise utilisiation of domestic gas and RLNG
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The GST Double Whammy For Gas Sector
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ONGC, OIL step up drilling shale wells in the fourth quarter FY 2016-17
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Data Section
Monthly Upstream Data
Monthly Downstream Data
Historical database
Data Archives
Special Database
Long Term Growth Strategy & Strategies to Achieve 2030 Aspirations
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Uptrend in ONGC’s Offshore Crude & Gas production
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Monthly average price of Indian crude basket from August 2016 to August 2017
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Power Situation In September 2017
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Region wise percentage share of crude oil imports: April-September 2017
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Status Of Oil India’s 4 Major Overseas Assets
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Story Of ONGC Reversing Production Trend In Onshore
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HPCL’s Consolidated profit and market capitalisation
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Paradip Refinery– Salient Features
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OIL: Finding, Development & Production Cost
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IOC’s R& D Activitie
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IOC’s E&P assets
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OIL’s Overseas Assets
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Key Features of HPCL Refineries
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ONGC: Seismic Survey Acquisition Performance - Q1 FY 2017-18
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Gross Refining Margins (GRM) of Refineries - First Quarter of FY 2017-18
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ONGC: 19 Production Projects Under Implementation
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Tax Element in Retail Selling Price of Petrol & Diesel: Developed Countries vis-a-vis India
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ONGC Rigs position as on April 1, 2017
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Petrochemical Import by India -2015-16
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ONGC: Drilling Cost
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Tenders [FREE Access]
ONGC
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GAIL
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