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Action taken statement on the 21st report of the Standing Committee on Petroleum and Natural Gas (2013-14)

Action taken statement on the twenty first report of the standing committee on petroleum and natural gas (2013-14)  on action taken by the government on the recommendations contained in the sixteenth report (15th Lok Sabha) on demands for grants (2013-14)' of the ministry of petroleum & natural gas

Plan and Non-Plan Schemes of MoP&NG

The Committee note that the Demands for Grants of Ministry of Petroleum and Natural Gas contains funds for plan schemes at INR 42 crores and Non-Plan Scheme at INR 65145.41 crore. The plan schemes are three namely

  1. Establishment of RGIPT
  2. Schemes for LPG connections to BPL families
  3. Indian Strategic Petroleum Reserves Ltd. (ISPRL)

The Committee note further that the funds under non-plan schemes are mostly reimbursement of subsidy and the major component is compensation to ONCs for under recoveries, subsidies for PDS Kerosene and domestic LPG subsidy to oil companies for supply of Natural Gas to N-E region etc. and the non-plan expenditure during 2013-14 has been budgeted at INR 65145.41 crore.

The Committee note that the though the Ministry has plan schemes namely RGIPT, ISPRL and the scheme for LPG connections to BPL families, they are shocked to observe that they have not seen any fund outgo last year. It appears that the MoPNG does not have any interest in implementation oil plan schemes. The Committee recommend that the plan schemes needs to be implemented by the Ministry with due seriousness coupled with regular monitoring at higher levels.

The Committee are of the view that energy mix is still predominantly in favour of oil and hence conservation of oil and gas increased use of ethanol blended petrol, bio-diesel, PNG coverage to lower strata of society are some of the issues which need to be promoted. Therefore, the Committee recommends that MoPNG should take the initiative to launch more plan schemes and seek funds to execute them.

The Ministry of Petroleum and Natural Gas   submitted   the following reply in this regard:

1.     Fund outgo for the Existing Plan Schemes

A.       ISPRL:
In the Annual Plan for 2012-13, a token amount of INR 1 crore was shown against "Strategic Storage Programme for Storage of Crude Oil" for filling of the crude oil. For filling the Strategic Reserves being constructed at 3 locations, i.e. Visakhapatnam, Mangalore and Padur, an amount of over INR 23,500 crores is required during a period of four years, starting from the time the first cavern facility at Visakhapatnam is ready.

The physical and financial progress at the three locations as on 31.03.2013 is given in the table below:

 

Cumulative Physical Progress

Cumulative Financial Progress* (INR cr)

 

Target

Actual

Target

Actual

Visakhapatnam

100

92*1

997.99

873.24*1

Mangalore

72.9

77.7

559.43

607.95

Padur

74.9

77.1

818.84

842.03

Shortfall because of the poor geology encountered in one of the cavern galleries.

Since the first cavern at Vishakhapatnam is yet to be physically completed, therefore, it was not possible to use any plan fund, which was earmarked for filling up of crude. This cavern is likely to be completed during the current financial year. At that time, request will be made to Ministry of Finance for additional allocation. The next cavern is due for completion only in 2014-15.

REPLY OF THE GOVERNMENT
As regards the Plan Scheme for Indian Strategic Petroleum Reserves Ltd. (ISPRL) in the Annual Plan for 2012-13, a token amount of INR 1 crore was shown against "Strategic Storage Programme for Storage of Crude Oil" for filling of the crude oil. For filling the Strategic Reserves being constructed at 3 locations, i.e. Visakhapatnarn, Mangalore and Padur, an amount of over INR 23,500 were estimated for a period of four years, starting from the time the first cavern facility at Visakhapatnam is ready. Now, the estimated cost of crude oil to be filled in these caverns is INR 26,400 crore.

The year wise requirement of funds in rupees for procurement of crude oil is as under:

2013-14

2014-15

2015-16

2016-17

2800

8500

8500

6600

The Visakhapatnam project has experienced delay because of geological surface which resulted in a major rock, slide in one of the cavern galleries in April, 2011. It is now expected to be commissioned in March 2014 and Mangalore and Padur facilities are expected to be commissioned in October, 2014. The Mangalore and Padur projects were primarily delayed because of land acquisition issues and finalization of the basic design as a result of the changes in crude oil receipt and discharge schemes which were beyond the control of the project proponents.

As the first cavern at Vishakhapatnam is yet to be physically completed, therefore, the plan fund could not be used or enhanced further. Recently, the time and cost overrun for both Mangalore and Padur Projects have been approved by the Competent Authority.

Source: SNP Infra Research