Transparent Gas Cylinders to curb Gas Pilferage

Transparent Gas Cylinders to curb Gas Pilferage
The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that in order to undertake a feasibility study on marketing of LPG in Composite cylinders by Public Sector Oil Marketing Companies (OMCs), a public tender has been invited for procurement of composite cylinders by Hindustan Petroleum Corporation Ltd.(HPCL). This pilot study is proposed in two select markets of Ahmedabad and Pune.

Public Sector Oil Marketing Companies (OMCs) have reported that the approximate cost of a composite cylinder is more than double that of a steel made cylinder. OMCs will be procuring these cylinders through competitive bids by floating Public Tender.

Efforts are being made to expedite launch of the pilot project, which is subject to successful supply of composite cylinders by the manufactures and getting statutory approvals.


Target for Ethanol Blending with Petrol
            The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that the details of percentage of ethanol blended by Public Sector Oil Marketing Companies (OMCs) during the last three sugar years and current sugar year (till 18th April, 2016) is as follows:

Sugar Year
Blend percentage
0.67 %
1.53 %
2.33 %
(as on 18.4.2016)
3.50 %

In order to scale up blending target upto 10 percent, the Government has taken following steps: 

(i)      The Government has fixed the delivered price of ethanol in the range of Rs.48.50 per litre to 49.50 per litre. 
(ii)     Ethanol produced from other non-food feedstocks besides molasses, like cellulosic and ligno cellulosic materials including petrochemical route, have been allowed to be procured.
 (iii)  Ministry of Petroleum and Natural Gas, on 1st September, 2015, has inter-alia asked OMCs to target ten percent blending of ethanol in Petrol in as many States as possible. 
(iv)  The procedure of procurement of ethanol under the EBP has been simplified to streamline the entire ethanol supply chain. 
(v)   Excise duty has been waived on ethanol supplies to OMCs for EBP by sugar mills during 2015-16. 

As per present Policy, only ethanol produced from molasses route is procured for the EBP Programme. Further, ethanol production, storage and its movement is controlled by State Excise Departments. The challenges in achieving the targets are:

(i)   Limited molasses availability for ethanol production.
(ii)   Limited ethanol making capacities with the sugar industry / distilleries,
(iii)  Production of ethanol in only few Sugar producing States.
(iv) Difficulties in inter and intra State movement of ethanol due to State specific  issues like delay in excise permissions, imposition of import / export duties and taxes.
(v)   Limited ethanol storage capacity with distilleries and OMCs.


Steps to Maintain Approved weight of LPG Cylinders
The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that all LPG distributors are under instructions to check the weight of the cylinder at their godowns through 100% checks before delivery to customers. Further all the distributors are under instructions to provide portable weighing scales to all their delivery boys for checking weight of the cylinder at the time of delivery. Whenever customers receive underweight cylinder, the distributors are under instructions to replace the same with correct weight cylinders.

Further, various steps have been taken to prevent pilferage/ supply of underweight cylinders by LPG distributors as under:

• OMCs officials carry out random checks at distributors’ godowns, delivery points, as well as en-route to ensure that correct weight cylinders are delivered by distributors.

• The distributors have also been instructed to ensure that the seals are verified & shown to the customers at the time of delivery.

• Joint inspections/ raids are conducted álongwith State Civil Supplies Deptt to arrest the menace of pilferage of LPG and cases are filed by the District Administration against the culprits under various provisions of Essential Commodities Act and other relevant acts.

• In order to have a more convenient, easy and effective way to enable the customer to air their complaints, Unique Toll Free Number 18002333555 in operation for complaint registration through call centres on industry basis.

• LPG Marketing Discipline Guidelines (MDG) have been revised to include quality/quantity control measures, clearly defining the penalties for various quality/quantity shortages as punitive measures and deter these kind of future irregularities.

• OMCs have introduced Tamper Evident Seals on pan India basis from 01.04.2016 to prevent pilferage/supply of underweight cylinders.
In all established cases of supply of underweight cylinders/ pilferage by distributors, action is initiated as per provisions of Marketing Discipline Guidelines/ Distributorship Agreement. 


Shifting to Hydrocarbon Exploration Licensing Policy (HELP)
The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Rajya Sabha in a written reply today that New Exploration Licensing Policy (NELP) has been operational since 1997. During the last two decades, various operational issues emerged while administering the contracts under NELP regime leading to many disputes with the operators, which inter-alia include - cost recovery limit, micromanagement by the Management Committee, procurement issues, methodology adopted for calculation of investment multiple, no incentive for the operator to keep costs low adversely affecting profit petroleum. Observations were also made by the Chawla Committee on “Allocation of Natural Resources” and Rangarajan Committee on “Production Sharing Contract Mechanism in Petroleum Industry” bringing out various deficiencies in the existing Production Sharing Contract under NELP. Based on the experience of administering NELP and deficiencies and shortcomings observed in its implementation, the Government brought out the new Policy keeping in view the principles of ‘ease of doing business’ and ‘minimum government, maximum governance’.

Petroleum and Natural Gas Rules (PNG Rules) 1959, define Petroleum as “naturally occurring hydrocarbons in a free state, whether in the form of natural gas or in a liquid, viscous or solid form”. There is no differentiation between conventional oil & gas and unconventional oil & gas such as CBM, shale oil & gas, tight gas and gas hydrates as all these are hydrocarbons in free state obtained from different geological formations. Therefore, single license for exploration of all types of hydrocarbon is considered under HELP.

The investment and subsequent increase in Government revenue will depend on the response of the investors to the bidding to be undertaken under HELP.
Under HELP, contractor will have freedom for pricing and marketing of oil & gas produced from these blocks. However, under NELP, pricing of oil and gas was subject to the relevant provisions of production sharing contract. 


Global Crude oil price of Indian Basket was US$ 41.68 per bbl on 26.04.2016
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 41.68 per barrel (bbl) on 26.04.2016. This was higher than the price of US$ 41.56 per bbl on previous publishing day of 25.04.2016.
In rupee terms, the price of Indian Basket increased to Rs. 2781.18 per bbl on 26.04.2016 as compared to Rs 2771.52 per bbl on 25.04.2016. Rupee closed weaker at Rs 66.73 per US$ on 26.04.2016 as against Rs 66.68 per US$ on 25.04.2016. The table below gives details in this regard:

Price on April 26, 2016 (Previous trading day i.e. 25.04.2016)                                                                  
Pricing Fortnight for 16.04.2016
(30 Mar to 12 Apr, 2016)
Crude Oil (Indian Basket)
                41.68                (41.56)         
             2781.18            (2771.52)       
Exchange Rate
                66.73                (66.68)

Daily Crude Oil Price- 27.04.2016  

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