The Planning Commission has slammed the weak regulatory regime in the oil & gas sector, blaming it on the petroleum ministry?s ?reluctance to give up its powers?. Speaking to FE, Planning Commission member BK Chaturvedi rued that both the regulators in the oil & gas sector?the Director General of Hydrocarbons (DGH) that oversees upstream activities and the downstream regulator, Petroleum & Natural Gas Regulatory Board (PNGRB)?lack independence and have not been granted powers by the ministry.
?The regulatory regime in the sector is very weak. The upstream regulator, we have recommended that it be strengthened, made more independent and given more powers. Large investments are coming into the upstream business and there is a need to have a better audit regime,? Chaturvedi said.
?The downstream regulator is also very weak. The (petroleum and natural gas) ministry has to have a fresh look at this. They have a regulator, but they haven?t really empowered it. They have not notified several of its functions,? the former Cabinet secretary pointed out.
The Integrated Energy policy (IEP), cleared by the Cabinet last year to serve as India?s roadmap to attaining energy security, had explicitly called for independent oversight in upstream and downstream activities, given the billions of dollars in investments at stake. The DGH was set up through a resolution in 1993 and the PNGRB was created in 2006, but the oil ministry is yet to notify most powers of the PNGRB.
Chaturvedi?s comments assume significance as the Murli Deora-led ministry had dismissed the need for an upstream regulator in a missive to the think-tank in August.
??Normally, a regulator is required when a level-playing field to all parties needs to be provided. In Indian upstream sector, policies such as NELP and CBM already provide a level-playing field to all companies to participate and obtain blocks for exploration of oil & gas through international competitive bidding,? the oil ministry wrote.