Even as the Cabinet Committee on Economic Affairs (CCEA) readies to take up gas pricing this week, petroleum minister M Veerappa Moily tells Santosh Tiwari and Pranav Nambiar that there is no basis to the talk of petroleum ministry supporting Reliance Industries, adding the government was trying to do what was best for investors. He also says the direct benefit transfer (DBT) scheme in LPG would be implemented in phases and a decision on a national roll-out would be based on a review of the first phase, which started on June 1 in 18 districts.

How is DBT in LPG going?

It has kicked off very well. We implemented it from June 1 and it is doing well in all 18 districts. After a month, I will review it. In the meantime, we have asked banks to seed Aadhaar. If they have made some progress in some of the districts, I will move on.

Seeding of bank accounts and Aadhaar numbers has been a problem, hasn?t it?

In these 18 districts, it is going on quite well, and 45-50% were covered within 10 days. Initially, it was only about 19%. In these areas, it was much more. It is good progress. From September 1, no subsidised cylinder would be given without Aadhaar. That is only in these 18 districts.

Do you have a plan for a national roll-out? When will that happen?

Yes, we have a plan. We need to prepare a road map after our experience in these 18 districts. We will roll out DBT in two more districts from July 1, which was pending due to elections.

So, three months? time will be given whenever DBT for LPG is introduced in any district?

Yes, three months? time will be given to people to come forward and seed their accounts.

What about the next phase?

I can?t give the road map right now. That depends on the implementation of the first phase and after gaining the experience from it, we can do that.

But you must be having some plan?

No, we don?t want to guess on that, and work on speculation. After a month, I will review it and then decide. In phases, I will plan it. I don?t think I can give the entire plan today.

What is the outcome in terms of numbers in 18 districts?

In the first seven days, 2.5 lakh households were disbursed a sum of R435 each in subsidies. We have already disbursed more than R10 crore. This was within a week, and now, it has doubled. I think we are enthused to carry it forward. We have to cover 14 crore consumers across the country.

Are you satisfied with the outcome?

No. I am keeping my fingers crossed, but the start is good.

There is much confusion right now on gas pricing decisions. Will the Cabinet take a decision on gas pricing or will the EGoM?

Not the EGoM. It will go to the CCEA because there are issues beyond NELP. Only NELP has been referred to the EGoM. That is why the Cabinet Secretariat suggested that it will go to the CCEA. We had to make a reference again to the Planning Commission and the finance ministry. As soon as we get their comments, we will move the Cabinet. The finance ministry had some reservations on the Rangarajan recommendations. Each department and ministry has got its view that we can?t object.

Are you of the view that the new price should be $6.5 per mmBtu?

This is ultimately subject to the CCEA decision. We will go by the large objective parameters laid down by the Rangarajan committee.

But the number may be different…

Its (Rangarajan committee) indication is about $8. We are coming around $6-6.5. Definitely not more than that. People are writing that we are helping only Reliance, but Reliance is not in the picture at all. It will come into picture only after 2014. It will not be the beneficiary. About 69% of the PSUs, my PSUs, will be benefiting. What happens is that some people are leaking Cabinet notes. If they leak out the entire Cabinet note, it is fair. But they do it in parcels to project the wrong picture, which is not correct. What appears in the newspapers is baseless. These are some of the distorted versions of the Cabinet note.

So you are saying the government is clear in its mind.

Yes. We are very clear. Our proposal will be according to framework laid down by the Rangarajan committee. It will not be applicable to existing contracts. This won?t be applicable to all those contracts under NELP. That will come into effect only when the contractual period is over. In the case of Reliance, it will be applicable only after 2014. And there is no retrospective effect. Moreover, the Rangarajan plan will survive till this Plan only?12th Plan, 2016-17. We have asked Vijay Kelkar to come out with a road map from there. Not only for exploration but also on the prices because Rangarajan has not recommended for that period. So, I am not coming out with my own formula to be imposed. Everything will be done objectively, scientifically, on the basis of the recommendations of the expert committee. We will go by the Rangarajan committee report and the Kelkar committee report. We will have 100% transparency and objectivity in doing this.

The Rangarajan panel has recommended $8; so everybody thinks it has to be $8. Is that a correct view?

Not really. The CCEA has to decide.

So, you think even according to the Rangarajan panel recommendations, a price of $6.5 per mmBtu can be reached?

Yes. And that will be applicable to forthcoming projects and not for the existing PSCs. The existing PSCs are governed by their contracts.

What happens when the contract ends in case of existing PSCs? Will it be $6.5 per mmBtu?

Then this price, which CCEA will approve, will be applicable?whatever, $6.5 per mmBtu is not approved as yet.

So, whatever CCEA approves will be applicable for whole of the 12th Plan. Or, there could be a review?

Whatever CCEA approves, will be applicable for rest of the Plan period.

Whenever there is a contract renewal, this formula would be applicable?

Yes. There will be clarity for the investors, the stakeholders. And there will not be any confusion, so that investments also start flowing. They will know what will be the road map and they will come accordingly. Otherwise, you know, now practically, the investments are not there because there is no clarity. There is total uncertainty. We would like to remove that kind of an ambiguity. The likes of companies such as BP have said even $8 per mmBtu is not enough. Their claim is high but we have to take an objective transparent view.

So, it?s clear that CCEA would ultimately decide. You have recommended $6-6.5 per mmBtu but the finance ministry is not agreeing with even $8 per mmBtu.

Each department will have its view; finance ministry is interested in investment. That is their view.

Is the finance ministry pressing for more than $8?

I don?t want to comment on that. Whatever decision we take, there should be incentive for people to come and invest here and also take further extension. So, the moment finance ministry and Planning Commission view comes, it will be taken to the Cabinet.

Yes. The Prime Minister is very keen that this has to be decided at the earliest. I don?t think we are going to delay.

Which are other policy initiatives in the pipeline?

Our new policy on permitting exploration in mining areas or producing fields has helped in the huge finds in Barmer by Cairn India and in Kakinada by RIL-BP. Now we have a big potential of shale gas in the country. US and China within five years could increase gas production substantially. But we don?t have shale gas policy at all. It has been pending for so many years. Now in 20-25 days it will go to the Cabinet as I have finalised the policy. In basins such as Cambay, Gondwana, KG onland and Cauvery, shale gas is available. Coal bed methane (CBM) is also a great potential resource available in the country. CBM reserve estimates are 92 tcf out of which less than 10% has so far been established. Around 33 blocks have so far been awarded. The new CBM policy has already been drafted and circulated within the ministries and I am taking it up with the Cabinet in 20-25 days.