(FE)
Greater thrust to domestic production of crude oil, boosting the refining capacity and raising the consumption of natural gas would be the top objectives of the new National Democratic Alliance (NDA) government in the hydrocarbon sector, Hardeep Singh Puri said on Tuesday after assuming charge as the Union Minister of Petroleum and Natural Gas, for the second straight term.
The minister also hinted that if the Indian basket of crude is sustained at around $70-80/barrel, the state-run oil marketing companies (OMCs) may consider cutting retail prices of auto fuels. The government would be firm on its target of 20% ethanol blending with gasoline and work to bring gas under the goods and services tax (GST), he added.
Talking about upcoming projects in refining sector, the minister said that BPCL is in advanced stage to set up greenfield refineries while GAIL is also planning an ethane cracker unit for petrochemicals. He, however, did not divulge the site of the new unit or the capacity being planned. “BPCL’s Bina refinery is coming up and Cauvery basin refinery is also coming up by Indian Oil at Chennai,” he said.
While retail prices of diesel and petrol are deregulated, the state-run OMCs are perceived to pay heed to the inflation dynamics and other political-economy factors, while taking their pricing decisions. Puri’s comments on the OMCs’ next move assumes significance in this context. Deflation in ‘fuel and light’ is likely to deepen in May, to -5.2% as against -4.2% in April, and the segment is seen to stay deflationary in the near-term owing to high base effects, and low energy prices.
