(a) whether the prices of petroleum products soar due to excessive dependence on foreign
countries for it and not promoting alternative source of fuel;
(b) if so, the reaction of the Government in this regard,
(c) the steps taken by the Government for promoting alternative source of fuel; and
(d) the success achieved by the Government so far in this regard?
MINISTER OF THE STATE IN THE MINISTRY OF PETROLEUM & NATURAL GAS (SHRI DINSHA PATEL)
(a) & (b): Global prices of crude oil and petroleum products reached new highs in the past
two years. The Indian basket of crude oil touched an all-time high of $75.20 per bbl on 8th
August 2006.
This steep increase in prices is having major impact on the Oil Marketing
Companies (OMCs) and Indian economy, as about 78 percent of crude oil requirements are
imported. Given the high level of import dependence, the impact of volatile international
prices needs to be reflected in the domestic prices.
Since passing on the entire impact of the steep increase in the oil prices to the consumers
would have resulted in steep increase in the domestic prices, the Government took certain
measures in favour of vulnerable sections of society by ensuring that 87% of the burden was
shared by the Government, the upstream Oil Companies and Oil Marketing Companies (OMCs),
and passing on only 13% of theburden to the consumers.
While moderate increases have been made in the price of petrol
and diesel, domestic LPG price has not been revised since November, 2004 and PDS Kerosene
since March 2002. While alternative fuels are being developed and tested for
their adaptability to engines and machines, as well as their environmental impacts, the
available quantities are far below the required quantities. Their progressive use will take
a few years to make any substantial impact, hence the dependence on petroleum products
will continue.
(c):- Government has taken several initiatives for promoting alternative fuels including
Bio-fuels, hydrogen and fuels cells and development of electric and hybrid vehicles. MOP&NG
has notified vide notification No. 580(E) dt. 20lb Sept., 2006 that subject to commercial
viability, the Oil Marketing Companies shall sell 5% ethanol blended-petrol as per Bureau of
Indian Standard specification through out the country except North Eastern States, J&K,
Andaman & Nicobar Islands and Lakshadweep w.e.f 1.11.2006. As regards
bio-diesel, this Ministry has announced a Bio-diesel Purchase Policy which has provided
for 20 Purchase Centres to be set up by OMCs all over the country, where these companies
would purchase bio-diesel which meets the standards prescribed by Bureau of Indian
Standards (BIS) at a price valid for six months. The Ministry of New & Renewable Energy
is carrying out R&D activities on applications of bio-diesel for stationary and transport
applications including testing diesel engines using different blend levels of bio-diesel
with diesel. That Ministry has set up a National Hydrogen Energy Board and prepared the
National Hydrogen Energy Road Map which provides pathway for production, storage and use of
Hydrogen. Energy in the country upto 2020.
(d):- Ethanol gasoline blend has been commercialized in the country and biodiesel blend is
in the demonstration stage. Studies are in progress for using hydrogen as transport fuel.