Global Crude Oil Price of Indian Basket was US$ 58.84 per bbl on 03.03.2015

The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 58.84 per barrel (bbl) on 03.03.2015. This was lower than the price of US$ 59.95 per bbl on previous publishing day of 02.03.2015.

In rupee terms, the price of Indian Basket decreased to Rs 3638.67 per bbl on 03.03.2015 as compared to Rs 3706.11 per bbl on 02.03.2015. Rupee closed weaker at Rs 61.84 per US$ on 03.03.2015 as against Rs 61.82 per US$ on 02.03.2015.

The table below gives details in this regard:

Daily Crude oil price- 04.03.2015

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Extension of PDS Kerosene and Domestic LPG Subsidy Scheme, 2002 and Freight Subsidy (for Far flung Areas) Scheme, 2002

The Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister Shri Narendra Modi, has given its approval to extend the PDS Kerosene and Domestic LPG Subsidy Scheme, 2002 and Freight Subsidy (for far-flung areas) Scheme, 2002 for a period of one year that is up to 31st March, 2015.

The approval will help in reducing the under-recovery of the Oil Marketing Companies (OMCs).

The Government was providing a subsidy of Rs.22.58 per 14.2 kg. LPG cylinder and Rs.0.82 per litre on PDS Kerosene and Domestic LPG Subsidy Scheme, 2002. Besides, freight subsidy was also being provided to PDS Kerosene and Domestic LPG consumers in far-flung areas under the Freight Subsidy (for far-flung areas) Scheme, 2002. These two schemes ended on 31st March, 2014.

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Impact of Fall in Crude Oil Price on Economy

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that since the country is dependent on import of crude oil to meet nearly 75% of its crude requirement, fluctuation in crude oil prices have significant impact on the import bill and current account balance. The recent decline in crude oil prices have helped to reduced pressure on inflation and import bill, thereby increasing the real value of GDP and facilitate its sustainable growth.

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Revenue Generated by Oil PSUs

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that at present there is no proposal before the Government to merge the Public Sector Oil Marketing Companies (viz. IOCL, BPCL and HPCL).

The prices of petrol and diesel have been decontrolled with effect from 26.6.2010 and 19.10.2014 respectively to increase competition and ensure better service to customers. Public Sector Oil Marketing Companies (OMCs) take appropriate decision with respect to pricing of all deregulated products. The Government continues to modulate the prices of PDS kerosene and Subsidized Domestic LPG and their basic prices have not been increased since 25.6.2011 resulting in under recovery to OMCs.

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Non-Availability of Cooking Gas Due to Bank Account Linkage

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that no LPG consumer is denied domestic LPG cylinder under the Direct Benefit Transfer for LPG (DBTL) scheme, namely, ‘PAHAL’ on account of not linking the aadhaar/ bank account to LPG consumer ID.

The time required for linking is dependent on the internal processes of stakeholders such as banks, NPCI etc. and hence the time required to complete linkage cannot be generalized. As on 01.03.2015, 80.6% (approx.) customers have joined PAHAL scheme. The State-wise number of active LPG consumer as on 01.03.2015 yet to join the PAHAL scheme.

OMCs have informed that their LPG distributors endeavor to supply LPG refill normally within seven working days from the date of booking. State/UT-wise pending refill bookings as on 01.03.2015

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Comparative Price of Crude Oil in 2009 and 2014

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that the details of month wise price of Indian basket crude oil along with Retail Selling Price (RSP) of Petrol and Diesel, at Delhi, at beginning of each month during 2009 & 2014 is given in Annexure.

Annexure

Annexure referred to in reply to parts (a) & (b) of Rajya Sabha Unstarred Question No.1090 asked by Shri Kiranmay Nanda to be answered on 4th March, 2015 regarding “Comparative price of crude oil in 2009 and 2014”

Month Wise Price of Indian Basket Crude Oil & RSP of Petrol and Diesel, at Delhi during 2009 & 2014

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Exploration of Shale Gas

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that the Government of India announced the “Policy Guidelines for Exploration and Exploitation of Shale Gas and Oil by National Oil Companies under Nomination regime” vide order dated 14th October 2013. Permission to carry out exploration and exploitation of shale gas and oil activities in 55 Petroleum Exploration Licence /Petroleum Mining Lease areas (ONGC-50; OIL 5) has been granted under the first phase of Assessment which is for 3 years.

ONGC has drilled one well in Cambay Basin, Gujarat where coring has been completed. Further, ONGC has spudded one more well for shale gas & oil exploration in Gandhar area of Cambay Basin. In addition, ONGC has collected cores from another 8 wells. ONGC has invested Rs. 78.91 crore for exploration of Shale gas and Oil as on 31.12.2014. assessment of the potential of shale gas and oil by OIL India limited is at the nascent stage.

To meet its requirements, India imports Natural gas from various countries. There is no distinction made regarding the source of the natural gas imported – conventional or unconventional.

For meeting the country’s growing energy demands, exploration and exploitation of shale oil and gas is essential. Under the notified policy, the National Oil Companies shall be permitted to apply for Petroleum Exploration Licence /Petroleum Mining Lease in at least 135 blocks awarded under the nomination regimes for assessment and exploitation of shale oil and gas under Phase II and III after completion of Phase I.

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Building strategic reserve of crude oil

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that the Government, through Indian Strategic Petroleum Reserves Limited (ISPRL), is setting up Strategic Crude Oil Reserves with storage capacity of 5.33 Million Metric Tonnes (MMT) at three locations viz. Visakhapatnam (storage capacity: 1.33 MMT), Mangalore (storage capacity: 1.5 MMT) and Padur (storage capacity: 2.5 MMT) to enhance the energy security of the country.

The entire expenditure on purchase of crude oil to fill the Visakhapatnam cavern is proposed to be done with Gross Budgetary Support (GBS). A part of the funding requirement for purchasing crude required to partially fill the Mangalore and Padur caverns would be met from GBS. The Government also continues to explore alternative models for funding the balance requirement of crude oil to fill Mangalore and Padur caverns.

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Fall in International Price of Crude Oil

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that international price of crude oil has fallen sharply between July, 2014 and January, 2015. The Refinery Transfer Price (RTP) of Petrol has reduced by Rs. 22.45 per litre from 1st Fortnight of July 2014 to 2nd Fortnight of February 2015. After taking into account the increase in Excise Duty amounting to Rs. 7.98 per litre, the OMCs have reduced the Retail Selling Prices by Rs. 16.29 per litre. Similarly, the RTP of Diesel has reduced by Rs. 20.93 per litre from 1st Fortnight of July 2014 to 2nd Fortnight of February 2015. After taking into account the increase in Excise Duty amounting to Rs. 6.70 per litre, the Public Sector Oil Marketing Companies (OMCs) have reduced the Retail Selling Prices by Rs. 11.23 per litre. Thus, the major portion of the decrease in RTP has been passed on to the consumers of Petrol and Diesel.

The profit/loss is computed only on quarterly basis by oil companies. The Combined Profit After Tax (PAT) of Public Sector upstream oil companies (ONGC, OIL and GAIL) in 3rd quarter of the financial year 2014-15 declined to Rs. 4,674 crore from Rs. 7,356 crore in 2nd quarter of the financial year 2014-15, due to reduction in the prices of crude oil and products. The OMCs (HPCL, BPCL and IOCL) have reported combined loss of Rs. 2,411 crore in 3rd quarter of the financial year 2014-15, as compared to a PAT of Rs. 416 crore in 2nd quarter of the financial year 2014-15 due to incidence of inventory losses.

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Reimbursement of Subsidy Amount to LPG Consumers

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that Government has not withdrawn the subsidy being given to the domestic LPG customers. It has introduced the Direct Benefit Transfer for LPG (DBTL) scheme, namely, ‘PAHAL’. Under the Scheme, LPG consumers joining the scheme, will get the LPG cylinders at market price and will receive LPG subsidy (as per their entitlement) directly into their bank accounts.

The scheme was launched in 54 districts on 15.11.2014 and in rest of country on 01.01.2015. On joining the scheme every LPG consumer is at present entitled for a Permanent Advance (PA) of Rs 568/-, which is provided in addition to the prevalent subsidy on the date of delivery of each subsidized cylinder. This is to enable a LPG consumer buy the first cylinder under the scheme which is delivered at market determined price. All LPG consumers who have not joined the scheme, are given a grace period of three months from the date of launch to join the scheme. During grace period such consumers will get LPG as per their entitlement at subsidized price. Additionally, a period of three months beyond grace period known as parking period is given to LPG consumers for joining the scheme. During parking period such consumers will get cylinders as per their entitlement at market price and subsidy will be kept parked with OMCs. This parked subsidy would be released to consumer as soon as consumer joins the scheme. However, if a consumer joins the scheme after parking period, the parked subsidy would lapse and consumer will get subsidy from prospective date only.

The scheme is aimed to transfer the subsidy benefit directly to beneficiary and curb diversion/black marketing of LPG cylinders.

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Demand Regarding Dealers’ Commission

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that the prices of Petrol and Diesel have been deregulated by the Government with effect from 26.06.2010 and 19.10.2014 respectively. Since then, the Public Sector Oil Marketing Companies are taking decision with respect to the dealer’s commission on Petrol and Diesel.

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Over 80 % LPG consumers have joined PaHaL

As on 2nd March, 2015, 81% active LPG consumers (11.74 crore) have joined the PaHaL scheme which was introduced in 54 Districts of the country on 15th November 2014 and in rest of the country on 1st January 2015. In a short period the enrollment has achieved a satisfactory level of penetration of over 80%.

An amount of Rs. 6745.41 crore has been transferred since 15th November, 2014 through 18.9 crore transactions. At present, a fixed permanent advance of Rs.568 is also given to every consumer. This has been revised to become variable every month, equal to the actual subsidy due at the time of booking w.e.f. 1.4.2015 and subject to a maximum of Rs.568.

The success of the scheme is a result of an intensive Information Education Campaign comprising of advertising through various means and directly reaching out to consumers, several innovative measures such as guardian officers for each district, deployment of technology by use of SMS, and a single window portal www.mylpg.in to enable consumers to join the scheme. The progress of the scheme implementation is being directly monitored at the level of Minister of State (Independent Charge) Petroleum and Natural Gas Sh. Dharmendra Pradhan.

PaHaL will save subsidy by reducing the incentive to divert subsidized cylinders and also provides an easy exit route for those who do not want to avail subsidy on domestic gas cylinders. The enrollment are continuing and it is expected that full benefits will start accruing with market pricing of domestic LPG cylinders cover the entire country w.e.f 1.4.2015.