The Parliamentary Standing Committee on Petroleum and Natural Gas has recommended that the petroleum and natural gas producing states of the country should given at least 50 percent of the total quantity produced besides the royalty on natural gas produced from offshore fields.
The panel, in its report has noted that during 2012-13, the total gas production was 40.7 billion cubic metres, of which the share of private/ JV in the KG basin located in Coastal area adjoining Andhra Pradesh was 13.7 billion cubic metres representing around 30 percent of the total natural gas production of the country. However, the allocation to Andhra Pradesh was pegged at just 29.02 mmscmd in 2012-13 out of the total allocation of 216.27 mmscmd, which was less than 15 percent. If the panel's proposal is accepted, will boost Andhra Pradesh Government’s revenues and economic activity on the back of state’s major chunk of oil and gas fields in the country.
Highlighting that the cost incurred due to the transportation of gas to far off places is causing price escalation, the panel’s report said that industries in the states and in the neighbouring regions should be given priority in the matter of allocation gas. Ministry of Petroleum and Natural Gas (MOPNG) to supply at least 50 percent of the gas produced to the industries belonging to the state where the fields are located, committee recommended.
Referring to the royalty on gas produced from offshore fields, the committee felt that the present New Exploration Licensing Policy (NELP) has put the states in disadvantageous position as they are being deprived of royalty arising out of the production of natural gas. Presently, the royalty from the production of deep water goes only to Central Government as all resources which are on the offshore areas belonging to the Centre. Thus, the committee recommended that the MOPNG should device a policy for sharing the royalty earned from the offshore areas also with the State Governments concerned.
