Days after the Union Budget 2021 announced the addition of one crore more consumers under Pradhan Mantri Ujjwala (PMUY) scheme, Tarun Kapoor, secretary of the Ministry of Petroleum and Natural Gas (MoPNG) believes that the move will take India to a near-100-percent penetration on liquefied petroleum gas (LPG). In an interview with Moneycontrol, Kapoor said the government is further easing out norms for getting an LPG connection.
He indicated that the planned gas transport system operator (TSO) is likely to be a government-owned company. Kapoor also batted for more private participation in the exploration and production sector to raise the output of domestic oil and gas. Excerpts:
Q: The Budget came out with the proposal to add one crore more LPG connections under the Ujjwala scheme. What is your road-map regarding this?
Our plan is to complete these additional one crore connections in two years' time. We have not made a separate allocation for this, but we have a general allocation for the subsidy to do this. Earlier, the expenditure used to be Rs 1,600 per connection, it is likely to be in the same range now. Here, we just subsidise the connection cost. We don't subsidise anything else.
We have also done a preliminary estimate of the people who are now left out. The number is this only (one crore) and this is a dynamic number. It can also happen that later on, there may be some more families who want to be part of the scheme. After the successful Ujjwala scheme, households without LPG is very less in India. We have around 29 crore households with LPG connections. With the one crore connections, we will be close to 100 percent LPG penetration.
Q: What is your strategy on fuel subsidy?
We want to gradually phase out kerosene subsidy. We have also created a policy giving incentives to those states which reduce kerosene consumption. Kerosene in the open market is priced approximately close to the diesel price. The subsidised kerosene is much cheaper. There is always this fear that subsidised kerosene may get diverted.
We want to connect everyone in the country to the LPG network. For LPG, while Ujjwala is one strategy to reach out to more people, we are also easing out the procedure for getting LPG connections. While theoretically, the current rule is that anyone is eligible, practically it is difficult to get a connection. We have asked our oil companies that those kinds of complaints should be eliminated. A person who is even shifting from one city to another temporarily should also be able to get an LPG connection without hassles. We want to move to a stage where with very basic documents, just some proof of name, one can get an LPG connection. Then the need for kerosene will not be there.
Q: When will the easing of these norms be in place?
The easing of this connection policy has already started and I am reviewing it on a regular basis. As a step forward, we are getting unified software prepared. We are getting a common information technology-based system in place. Right now, the three companies have their separate IT-based systems. We also want to popularise the mobile applications that our companies have so that no one has to keep a physical booklet.
Through this software, inter-company migration will become very easy. At least in cities, we want to ensure that a person should have at least a choice of three distributors within the same company.
Q: The government is in the process of privatisation of Bharat Petroleum Corporation (BPCL). Can we expect more companies in the sector going for disinvestment?
This is something that the Department of Investment and Public Asset Management (Dipam) will have to take a call on.
Q: The Budget had announced setting up of a gas transport system operator (TSO). What will be its nature?
The Cabinet will have to take a final decision on this subject. We will try to make it a government-owned company so that it can be independent. It will be almost on the lines of Power System Operation Corporation (POSOCO) in the power sector.
Q: Why is it that domestic oil and gas production is not picking up?
Our gas production is increasing now. We want to encourage the private sector more. Out of 26 sedimentary basins that we have, only eight are producing. When we try to expand, things will change. The new areas will take three to four years to come into production.