CAG for autonomy to DGH; Arm's length relation with OilMin

Government auditor CAG today said that the Directorate General of Hydrocarbon (DGH) should be given autonomy in discharging regulatory functions while working at arm's length with the oil ministry.

In its much-awaited audit report of fields operated by firms like Reliance Industries, the Comptroller and Auditor General of India (CAG) said that the role of the DGH be clearly demarcated into regulatory and technical functions.

DGH, which advises Oil Ministry on technical issues concerning oil and gas exploration and production, is not an independent entity, Deputy CAG Rekha Gupta said at a press conference called to brief about the findings in the report that was tabled in Parliament today.

The CAG wanted DGH separated from the executive.

"They are regulator and they should not have executive powers. There should be an arm's length distance between executive and regulator," Gupta added.

"In our view the roles and functions of DGH encompass two sets of functions with potential conflict of interest -- an upstream regulatory function, and a function of rendering technical advice of government of India. Consequently, we
recommend that the functions currently discharged by the DGH be clearly demarcated," it said.

CAG said while the technical advisory and related functions should be discharged by a body wholly under the Petroleum Ministry, regulatory functions; like review of hydrocarbon reserves and reservoir management; should be discharged by an autonomous body that will work in close coordination of the government.