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COVER
STORY: GOVERNMENT
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Ram
Naik
Petroleum and Natural Gas
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| Oil
Is Not Well |
Ministers:
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2
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Joint secretaries and above:
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6
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No. of PSUs referred:
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12
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Budget in Rs cr (2001-2):
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7.2
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Accountability
is second nature to Ram Naik. Ever since he started contesting elections
22 years ago, he has been publishing annual reports detailing his responsibilities
and achievements in his constituency. "It is to tell the voters what
I have done and what I plan," he says.
That's Naik as a politician. Naik as the minister
for petroleum and natural gas does nothing of that kind. For instance,
he doesn't say how he intends to meet the deadline for scraping administered
price mechanism (APM) for petroleum prices by April 1, 2002. By drastically
reducing the existing subsidies,the APM removal would raise the price
of LPG by 25 per cent and kerosene by 16 per cent. It would also end subsidy
on diesel.
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| Promptness of response |
8.0
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| Understanding of issues |
9.0
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| Commitment to reforms |
9.0
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| Openness to ideas |
8.0
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| Achievements |
5.0
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| Average score |
7.8
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| OVERALL RANK |
1
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| All ratings are on a scale
of 7 |
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COST
OF NON-PERFORMANCE
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Rising dependence on imports doubles forex payment for crude oil
to Rs 78,000 cr in 5 years
Uncertainty over extent of price decontrol holding up private
investment in retail business
COMMITMENTS
To remove price control on petroleum products by April 2002.
Increase domestic production of crude oil by 10% in 3 years.
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But most importantly, it would expose domestic
prices to international volatility. Naik should initiate a debate on consequences
of APM dismantling right now, or else it will also lead to kind of last
minute confusion and uproar that is currently
on in Delhi over the use of CNG as a fuel. A regulatory body that would
monitor the petroleum sector post-APM hasn't yet been
set up
On his part Naik says that "his ministry
is ready to dismantle APM according to the schedule. After all we have
met all the other APM targets so far."
India's dependence on imported crude oil has
increased from 45 per cent in 1990 to over 70 per cent in 2000. As a result,
the drain of foreign reserves has more than doubled in the past five years-from
Rs 34,500 crore to Rs 78,000 crore. Naik has taken a few corrective steps.
In just five months, 23 blocks have been contracted under the New Exploration
Licensing Policy against only 22 blocks in the past 10 years. There is
a thrust on alternative fuels like coal-bed methane and ethanol. Also,
Rs 10,000 crore has been invested in Bombay High to boost productivity
by 10 per cent.
So far so good, but the next few months will
be taxing. "The APM will move as scheduled. To sort out the subsidy
issue and oil pool deficit, we will seek help from the finance minister,"
he says. Call it the lull before the storm.
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