Union minister of petroleum and natural gas Veerappa Moily talks about decontrol of diesel prices, handling a difficult portfolio and why he wants Rahul Gandhi to be prime minister. This session was moderated by Maneesh Chhibber of The Indian Express

Veerappa Moily: This is a very complex ministry. Energy security constitutes an important component of national development. As of today, more than 75% of all petroleum products are imported. It?s not a happy picture for any country. The annual import bill is to the tune of $140 billion and it goes on increasing. The positive side is that we have the potential, particularly on the exploration side, and with the proper policy environment and pro-active approach, I am hopeful that 50% of our oil import can be reduced, latest by 2020. That is the kind of investment environment that I am creating.

Maneesh Chhibber: We keep hearing that, for whatever reasons, there were licensing problems, clearances weren?t given for exploration, the ministry is sitting on proposals… How are you dealing with that?

Those (pending proposals) are all poised for decisions. For various reasons, they were held up, but I am clearing them one by one. We need to attract investors. I will make sure that the held-up blocks allotted under NELP (New Exploration Licencing Policy) or pre-NELP regimes are cleared expeditiously.

Maneesh ChHibber: How many blocks were held up?

The government has allocated 254 blocks so far under NELP. Out of these, exploration and development activities in 73 blocks were halted due to non-clearances by various agencies. Clearances for 39 blocks are still awaited where investment of about US $13.5 billion is blocked. This was taken up by the Cabinet Committee on Investment as the first agenda and the blocks are being cleared one by one with mutual discussions.

DK SINGH: The Railway Ministry was not very happy with the timing of your decision to decontrol diesel prices.

We are moving towards deregulation of diesel in a phased manner and hope to complete the process in around two years? time. As regards de-regulation of bulk diesel, the railways and other organisations can make provisions for the increase in their respective budget. Where will I get the money? The deregulation was decided in principle long ago, I am only putting that into effect.

Subhash Narayan: The defence ministry had classified five blocks in the KG Basin in Andhra Pradesh as no-go areas. What is the progress on that because discussions have been going on for a long time?

As I said earlier, these blocks are being cleared one by one. Two blocks in KG Basin have already been cleared. Now it will go back to the Cabinet Committee on Investment for final clearance.

Prashant Mukherjee: On the recent recommendation of the Rangarajan panel on pricing of domestic gas, industry experts believe the prices have not been fixed according to international standards. Also, the fertiliser sector has written to the finance ministry and to you saying they are not happy with the prices. Are you planning to take it up with the Cabinet Committee?

We are yet to decide on the Rangarajan committee (recommendations). We are waiting to get a feedback from various ministries on the Cabinet note. Of course, there are issues and the private sector has also made presentations in this regard. There are certain issues pertaining to deep water blocks, which will be kept in mind while taking a final decision in the matter.

Subhomoy Bhattacharjee: When you say oil marketing companies have a problem, does this mean the minister is saying that their market cap and indices might go substantially downwards because of the present pressure on pricing?

The question is one of survival. We are already sharing an under-recovery of R1,63,000 crore. If there is a problem with the calculation, we will discuss with the finance ministry and work on that. But if the share is reduced, it will mean that some of the refineries cannot work at all.

Subhomoy Bhattacharjee: So you are saying that the current reduction of subsidy needs to be corrected?

That is what we are telling. That is something we want the finance ministry to reconsider.

Seerat Grover (student, Apeejay School, Saket): Do you think that the increase in the prices of petrol and diesel will lead to a fall in the use of private vehicles in our country? If the answer is no, then what can be done to encourage people to use public transport?

The shift to public transport is the ideal thing to happen. The consumption of oil in our country can be contained… Prices are hiked not just to discourage people from using their own vehicles; it is also to see that these oil marketing companies run. If you don?t import, then you have a problem. This chain of supply should continue. Otherwise nothing will be available for you tomorrow. That is the difficulty. I don?t think increasing prices is a deterrent against using diesel or oil.

Coomi Kapoor: Traditionally, the petroleum ministry comes under pressure more than other ministries, whether it is from the industry lobby or from various other government ministries. Are you homesick for your earlier portfolios or are you finding it easy to deal with the pressure?

It is a very difficult portfolio. I must tell you that these prices will not come down immediately. For example, shale oil is available in USA for about $3 per mmbtu, but we are paying around $15 per mmbtu for importing LNG. Suppose I am in a position to produce shale gas here, imagine, I can bring it down to $2-3, then what will be the impact? The country has to see to it that we have indigenous production of oil and gas. If that is done, I can reduce the price tomorrow, straightaway. Put more money in the hands of these companies, let them make more investment. Let them have modern refineries and you will see efficiency rise. We can?t manage vintage refineries.

Coomi Kapoor: So have you been able to figure out the pitfalls of this ministry because it has been the downfall of many a minister?

I have always said that I am not a status quoist. I always want to look ahead or beyond. I don?t want to just survive; I would like to see that the country survives. A minister can be sacrificed but the country should survive. We will have to plan for energy security. By 2030, this country can become self sufficient in oil and gas. That is the potential we have and that?s the kind of environment I am creating. Once you fuel this growth, things will change. I am going on a big acquisition process outside this country, wherever it is available. GAIL and ONGC are doing it. Acquire there and bring the oil. For that, we need LNG terminals. Which is why, in 10 years, 300 cities should have the gas pipeline. We are building a national grid for gas supply. Now Dabhol, which was junk 10 years ago, has been revived. The pipeline from Dabhol to Bangalore is complete. But at the same time, it should be a holistic approach. When the gas is available, there should be pipelines to transport it. My concern is for the maximum utilisation of these pipelines, otherwise they will become idle. Again, we are planning the 1,700-km TAAPI pipeline. The Cabinet has cleared the participation of GAIL in it.

Hritik Rohila (student, Apeejay): From what I understand, the ministry is trying its best to meet the demand of the population. But with such a big population, will that be an impossible task?

We can always transform our huge population into a demographic divided. We need to tap the resources available to us, connect human resources to physical resources.

Rakesh Sinha: China?s oil and natural gas pipeline from Myanmar will be ready by May. So what sort of headway have we made in Burmese reserves?

We are yet to tackle Myanmar. I would like to follow a more aggressive policy of acquiring assets abroad. That?s why we are going in for countries like Mozambique, Tanzania, Nigeria and Angola in Africa. South America is a potential area. Our focus areas are Brazil, Venezuela and Columbia. Companies are also entering into mature markets like the US and Canada. GAIL is already in the US and they have already acquired stakes in shale gas and entered into upstream projects.

Arun S: When can we see the first shale gas auction and how different is it going to be from the other oil and gas options?

If everything goes right, the policy will be in place very soon. The Cabinet note will go immediately, say within 20 days. Shale gas will be available in private lands. In America, it is easy. Land is not a problem because minerals and resources under the ground belong to the respective private party. But that?s not the case here. Whatever is underground is the sovereign right of the state.

DK Singh: Rahul Gandhi has said asking when he will be prime minister is a wrong question. Do you think he is not interested in the job?

I think he is. We must appreciate he has spoken as a true democrat. In a democracy, nobody will claim that I will be the prime minister. It cannot be done. Ours is a democratic culture. Rahul?s comments show his humble approach to politics. I think this is a model which every youngster should follow.

DK Singh: So he is not ruling himself out of the race?

I don?t think you should see it in a negative way. And he has left it to the people and party to choose. That is a good democratic impulse, one has to appreciate that. The party takes decisions from time to time and, of course, people want Rahul to be the PM. I also want Rahul to be the PM because he is the future of the Congress.

DK Singh: In 2014?

In 2014, yes.

DK Singh: Your home state Karnataka is going to the polls in a couple of months. You are part of the subgroup on alliances. Are you thinking of an alliance with the JD-S in Karnataka?

So far, no such proposal has come to my knowledge.

DK Singh: Rahul Gandhi has been a prime mover of the go-it-alone policy in the party for the past six or seven years. Suddenly, you have a sub-group on alliances.

Our party should not be a casualty in the process of building alliances. That is Rahul?s philosophy and I totally agree with him. There have been times when we have neglected the party (while being in an alliance). That process has to stop, we should co-exist with another political party. You should compete for a position. For example, in Karnataka, I don?t think we need an alliance. Alliances fail?if you remember, some time ago, Dharam Singh was the CM and H D Kumaraswamy from the JD-S was the deputy CM. Kumaraswamy betrayed us and went with Yeddyurappa.

DK Singh: Rahul has been talking about changing the system in the party. You have been part of the system for decades. How do you feel?

He is right. I was chairing a committee and he was a member. We said we need to change the old system and bring in a new system. Unless you change the governance process, whether in a political party or in governance, we will not fit into the future.

DK Singh: Are you for the high command system or against it?

High command is a myth.

Ultimately, it is the leadership which counts. Leadership cannot be termed as high command.

Subhash Narayan: Are there major hindrances in the Iran oil pipeline?

I don?t want to comment on that today because of diplomatic concerns. But there are two factors. It can be met by increasing our exports to Iran?this is what the commerce ministry has to attend to. The balance of payment position could be improved. How long can you go on accumulating currency here? That will lead to other problems.

Maneesh Chhibber: One of the biggest concerns with the fuel prices is that many state governments have different kinds of taxation on fuel. Have you ever spoken to the state governments so we can have a single petroleum price across states?

We have been taking this matter up with various state governments. But state governments are not agreeing.

Coomi kapoor: How do you look at Modi?s possible emergence as the BJP?s PM candidate?

He has emerged in Gujarat. But I do not think he has the ingredients to go across the country. India is an umbrella with various components. He does not enjoy the principle of inclusiveness and he cannot embrace the entire country. I don?t think he is fit enough to become a national leader. Look at the arrogant way in which he is giving statements and arrogantly assuming that he will be the next PM. Look at the way other countries are treating him. Certain people may like him, but to be a PM candidate, he should enjoy international acceptability. And he does not qualify.

Ruchika Talwar: You also have some literary pursuits. Are you working on some poem or play or book?

My Ramayana Mahanveshanam has been translated into Tamil, Telugu and English. The fourth volume in Hindi will be published soon. Now I am writing a book on Draupadi, titled Yugavandi Yagyasini. It may come out within six or seven months.

Ruhi Tewari: The BJP seems to have sounded the poll bugle with all the hype surrounding Modi, but the Congress is busy fighting day-to-day issues.

I can understand the BJP creating a hype. Any political party should aspire for more. Both the BJP and Congress will have to do a lot of homework. Whether the BJP claims to be an all-India party or a national party, whether Modi will fit into that canvas… is for them to decide. The second issue is the NDA. Where is the coalition? I don?t know who the BJP?s partners are. Those partners who have traditional been with them are nowhere in sight. Modi cannot elevate himself as a national leader. A true leader has to emerge.

Transcribed by Dipankar Ghose and Apurva