Friday, July 19, 2013

Will Rangarajan formula eliminate all problems in Oil and Gas sector?

Press release from Ministry of Petroleum & Natural Gas, GOI states that,

"...committed to deal with the energy security issues... gas pricing formula effective 01-04-2014 was recently revised... This...will boost investors’ sentiments in the sector...exploration is expected to be greatly encouraged by implementation of forward-looking Rangarajan Committee recommendations.

"...taken a number of measures to boost investment and accelerate exploration work... CBM Policy and Shale Gas Policy are being finalised while work on setting up National Data Repository (NDR) has also commenced" - Dr Moily

"...Petroleum Secretary Shri Vivek Rae called for faster decision making."


Do you really believe pricing is the only problem? Will all glitches evaporate if we increase the pricing? I don't believe. We need to have more stable and forward looking legal framework and regulatory mechanism in oil and gas sector. It should not be something which takes different forms in every other fortnight or whenever GOI get a court notice. If India has Oil & Gas deposits, foreign companies may be ready to invest; without a stable mechanism all will sit in the fence only.

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