Numbers show ONGC, OIL†not performing: Dharmendra Pradhan

Jul 07 2014, 11:22 IST
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Summary'I am in favour of direct transfer of subsidies.'

Dharmendra Pradhan, 45, a native of Odisha and a Rajya Sabha member from Bihar, took over as the minister of state (independent charge) in the ministry of petroleum and natural gas when it was facing the debate over gas pricing, arbitration between the ministry and oil and gas contractors, alleged policy paralysis, drying up of investments and continuously dipping domestic oil and gas output leading to more imports. Pradhan, who is putting in place a strategy to ramp up oil output through a vibrant investment regime, is of the view that any domestically-produced commodity cannot be sold at international prices. In a free-wheeling interview with FE's Siddhartha P Saikia, Pradhan outlines his plans as minister. Excerpts:

From day one, your priority has been to increase domestic output of oil and gas. How would you plan to go ahead?

Primarily, there are three areas that have to be looked at. First, some internal reforms are necessary to remove bottlenecks. Second, technology has to be tied up to develop small and marginal fields across different sedimentary basins. And the third is about skillful management with proper accountability. This would help the domestic production of oil and gas to increase.

When you say internal reforms, do you mean empowering oil regulator Directorate General of Hydrocarbons (DGH), time-bound clearance of issues and reforms in the production sharing contracts (PSC)?

Yes, empowering DGH and reforms are included when we talk about making internal reforms. The administrative process needs to be fast tracked. What was the problem with the UPA government? There was a policy paralysis. There was a sense of lethargy across all departments. Now, this would not happen and there would be accountability.

Gas pricing has been a matter of debate. Do you agree with the concept that domestic gas prices should be linked with international benchmarks?

It is important to have a policy regime that ensures remunerative price to gas producers. But, tell me about a single product that is produced domestically but sold at international prices. Also, give me an example of any country which implements a mechanism where any indigenously-produced item is sold at international prices. I would like to know if such a system exists anywhere. Both domestic and imported gas have their own markets and business models. It is important to have a business-friendly policy for investments, but that doesn't mean that a domestically-produced product is sold at a much higher rate than warranted.

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