Lok Sabha Question No. 3204 (UNSTARRED), answered on 2018-08-06
Subject: Revamping of Crude Import Policy
Ministry: PETROLEUM AND NATURAL GAS
Asked by: Kunhalikutty, P.K., JYOTIRADITYA MADHAVRAO SCINDIA, DEVAJIBHAI GOVINDBHAI FATEPARA, MUTHAMSETTI SRINIVASA RAO (AVNTHI), SUSHMITA DEV, KURUPPASSERY VARKEY THOMAS, ELUMALAI VELLAIGOUNDER

## GOVERNMENT OF INDIA LOK SABHA UNSTARRED QUESTION NO. 3204

## TO BE ANSWERED ON 6 th  AUGUST, 2018

## Revamping of Crude Import Policy

3204: SHRI P.K. KUNHALIKUTTY:

SHRI JYOTIRADITYA M. SCINDIA:

SHRI DEVAJIBHAI G. FATEPARA:

SHRI MUTHAMSETTI SRINIVASA RAO (AVANTHI):

KUMARI SUSHMITA DEV:

PROF. K.V. THOMAS:

SHRI V. ELUMALAI:

Will the Minister of PETROLEUM AND NATURAL GAS be pleased to state:

- (a) whether the Government has been able to achieve the targets fixed to reduce its dependency on oil  imports  during  the  last  four  years  and  if  so,  the  details  thereof  along  with  the  likely  hurdles coming in the way to reduce crude oil dependency and the steps taken to address the same in an effective way;
- (b) whether the Government has revamped its crude import policy and if so, the details thereof and the extent to which the revamping of crude import policy is likely to benefit the common man;
- (c) the quantum and value-wise crude oil imports made by the Government during the said period, year/country-wise;
- (d) whether the Government proposes to seek exemptions from sanctions imposed by United States of America and look at alternate payment mechanism to enable it to purchase oil from Iran and if so, the details thereof along with the steps being taken to stock oil by our refineries to meet any eventuality;
- (e) whether the price of crude oil in the Indian basket has shown a sudden rising trend recently and if so, the details thereof and its likely impact on the country along with the price of crude oil during the last three years and the current year, year-wise;
- (f)  whether  the  Government  has  requested  OPEC  to  reduce  the  prices  of  crude  oil  which  are reportedly  hurting  the  fiscal  balance  of  the  country  and  if  so,  the  details  thereof  along  with  the reaction of the OPEC in this regard; and
- (g)  whether the prices of oil and gas have become subject to the vagaries of geopolitics and the Government has urged OPEC to commit ensuring of more sustainable prices and if so, the details thereof  along  with  the  steps  being  taken  to  check  the  rising  trend  and  mitigate  its  impact  on common man?

## ANSWER

## MINISTER OF MINISTRY OF PETROLEUM & NATURAL GAS (SHRI DHARMENDRA PRADHAN)

- (a) Various  steps  taken  by  the  Government  for  reduction  of  import  dependency  include increasing  domestic  production  of  oil  and  gas,  promoting  energy  efficiency  and  conservation measures,  giving thrust  on  demand  substitution,  capitalizing  untapped  potential  in  biofuels  and other alternate fuels/renewables and implementing measures for refinery process improvements.

Government  has  taken  various  policy  reforms  for  enhancing  domestic  hydrocarbon  production which  include  Hydrocarbon  Exploration  Licensing  Policy  (HELP),  Open  Acreage  Licensing Policy (OALP), Discovered Small Field Policy, Marketing and Pricing freedom for gas produced from deepwater, ultradeep water and high pressure high temperature areas, easing out rigidities in the  existing  Production  Sharing  Contracts  (PSC),  Policy  for  Extension  of  Production  Sharing Contracts, Policy framework  for  streamlining of operation of  PSCs  and  exploration  and exploitation of unconventional hydrocarbons, transparent and clear policy for grant of extension of PSCs  of  small  and  medium  sized  discovered  blocks,  National  Data  Repository  and  National Seismic Programme  for unappraised areas.  Government has also taken several steps to promote clean alternative fuels in order to reduce imports of crude oil which includes National Policy on Biofuels and encourage the use of alternative fuels such as Ethanol and Bio Diesel.

- (b) Oil Marketing Companies (OMCs) formulate policies for import of crude oil in their best commercial  interest  and  in  accordance  with  the  extant  guidelines  of  the  Central  Vigilance Commission, etc.
- (c) Year-wise quantum and value-wise crude oil imports during the last four years is as given below:

## Quantum and value of crude oil imports during the last four years

| 2014-15                            | 2014-15             | 2015-16       | 2015-16          | 2016-17       | 2016-17             | 2017-18 *     | 2017-18 *          |
|------------------------------------|---------------------|---------------|------------------|---------------|---------------------|---------------|--------------------|
| Quantum Million Metric tonne (MMT) | Value ( ₹ in crore) | Quantum (MMT) | Value ₹ in crore | Quantum (MMT) | Value ( ₹ in crore) | Quantum (MMT) | Value ( ₹ in crore |
| 189.4                              | 6,87,416            | 202.9         | 4,16,579         | 213.9         | 4,70,159            | 220.4         | 5,65,951           |

- (d) India  has  taken  note  of  the  re-imposition  of  US  sanctions  on  Iran  in  wake  of  the  US pullout from the Joint Comprehensive Plan of Action on May 8, 2018. Indian refineries import crude oil from diverse sources, including from Iran, depending on their technical and commercial considerations.
- (e) The average price of Indian basket of crude oil  year wise for the last three years and current year is as under:-

| Year                            |   Average price of Indian basket of Crude Oil Prices($/bbl) |
|---------------------------------|-------------------------------------------------------------|
| 2015-16                         |                                                       46.17 |
| 2016-17                         |                                                       47.56 |
| 2017-18                         |                                                       56.43 |
| 2018-19 (till 31 st July, 2018) |                                                       72.97 |

The increase/decrease in crude prices by one $/bbl results in increase/decrease of crude oil import bill by about ₹ 10,880 crore per annum. (Assuming annual average exchange rate of Rs.65/US$).

(f)  &  (g)  India  gave  a  call  for  responsible  and  reasonable  pricing  at  several  international  fora, including at the 16th International Energy Forum Ministerial meeting held in New Delhi in April 2018.  During  discussions  with  OPEC,  India  has  stressed  that  the  OPEC  should  work  with consuming  countries  for  the  benefit  of  both  producers  and  consumers. The  crude  oil  price fluctuation  is  a  frequent  market  phenomenon  and  the  price  of  crude  oil  is  determined  by  many factors, including geo-political situations and demand and supply in the global market.

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