Draft energy policy pushes for PNGRB role in upstream sector
The draft energy policy has proposed enlarging the regulatory ambit of the Petroleum and Natural Gas Regulatory Board (PNGRB) over “selected statutory aspects of the upstream business, including HSE, data collection, joint development of reservoirs in adjacent blocks, sharing of infrastructure and promotion of acreages”.
Currently, the PNGRB regulates certain aspects of the downstream business, while the upstream sector is monitored by the Directorate General of Hydrocarbons (DGH). Both these organisations are not fully empowered to regulate the sectors.
The draft, however, says, “The contract administration role of production sharing contracts will remain with the DGH. But for that, the former will have to be equipped with adequate and competent resources.”
India also aims to achieve competition between fuel sources on calorific parity basis (provided the non-fuel economics is also neutral), ease of entry and exit for players, free consumer choice of vendor and market determined prices, says the draft. “However, many of these features evolve over time when conditions ripen,” it adds.
The draft policy also lists several new regulatory interventions like separation of content and carriage in electricity, city gas, liquid fuels (at select locations), sharing of energy infrastructure by inclusion in the definition of “common carriers” (storages and marketing infrastructure, ATF hydrants, offshore infrastructure, LNG terminals and aviation fuel infrastructure) and grant of choice of service provider (LPG, kerosene and electricity). Besides, data sharing, especially in the area of oil and gas exploration, is important.
“The existing regulations need to be expanded to address the needs of our energy market to usher in a strong market framework. The existing regulators will provide for or clarify through regulations unbundling between gas transporters and marketers, overlap between jurisdictions relating to competition issues, adequate returns to gas pipeline developers in the initial years when the throughput is minuscule, induction of latest technology, robust data collection and dissemination, and health, safety and the environment (HSE),” it states.
NITI Aayog is preparing the national energy policy, a draft of which has been unveiled for public comments. According to NITI Aayog, the four objectives of the energy policy are access at affordable prices, improved security and independence, greater sustainability, and economic growth.
The draft says unlike mature energy markets, Indian energy regulators must undertake a developmental role to help bring in more players, enhance availability, help reduce entry costs and help different segments of the business integrate well.