Govt Saved 92233 crore due to fall in Crude Prices

The decline in crude prices seems to be working in favour of India as the import bill of the country has come down heavily, during FY15 owing to sharp decline in the prices of crude. Minister of state (I/C) for petroleum and natural gas Dharmendra Pradhan, informed Rajya Sabha that during FY 15 the government spent Rs. 355382 crore on the import of crude oil as against Rs. 447615 crore spent during FY14 on the same head. This clearly shows a saving of Rs 92233 crore during the last one year, marking a decline of around 21%. Though, on the other hand, due to such drop in the price of crude oil, gross revenue of upstream Public Sector companies has also declined, hurting their margins. “Similarly, Public Sector Oil Marketing Companies (OMCs) reduce the retail selling prices of Petrol and Diesel due to their linkage with international prices,” Minister informed. 

The domestic production of crude and natural gas also remained stagnant or declined during last three years due to natural decline in production from the ageing fields of ONGC and OIL. Natural Gas production has declined from Krishna Godavari Basin. The crude production during FY15 remained at 37.460 MMT as against 37.866 MMT produced during FY13, while Natural Gas production remained at 33.657 BCM as against 40.68 BCM produced during FY13, showing a sharp decline of 7.023 BCM. The concerned government is taking a number of initiatives to increase domestic production of crude oil and to promote conservation of petroleum products.

 Under this Improved Oil Recovery (IOR)/Enhanced Oil   Recovery (EOR) measures have been taken up using latest technology. Also government wants to bring into production new discoveries at the earliest. For this the government has already approved a policy framework for early monetization of hydrocarbon discoveries under PSC regime. “This policy has addressed rigidities in the timelines of the PSC and has allowed the contractors to start   production at the earliest,” informed Pradhan. The government has taken up various other measures that will facilitate enhanced exploration.