Integrated Energy Policy to come for Cabinet approval soon

The Pioneer, New Delhi
A speedy governmental process has been put to work to finalise the Integrated Energy Policy. In a months time pending issues from various ministries would be discussed by the Cabinet Secretary along with the Committee of Secretaries and the policy will be brought up to the Cabinet Committee of Economic Affairs (CCEA) for approval.

In a recent meeting held with the PM of the Energy Coordination Committee it has been directed that the Planning Commission will soon constitute an expert committee to undertake a comprehensive review of the energy sector and make recommendations for Policy on that basis. It has also been decided that all concerned ministries and departments will indicate within ten days the milestones undertaken as well as action initiated or about to be initiated by their ministries. In the presentation given to the PM, by the Member Energy, Planning Commission ,on making the energy sector competitive- it was suggested that market determined pricing reflecting opportunity costs, trade parity pricing at the point of sale and effective and targeted dealing of taxes and subsidy to meet the needs of the BPL families will be the need of the hour . Member Energy has suggested that across all energy segments during the transition period of shortage of supply ,regulators should be created. It was suggested that there should be a creation of coal regulator to monitor and regulate the coal sector on similar lines as has been created in the Oil sector. Add to this there was a need felt for regulatory intervention for pricing of upstream gas. There is also a suggestion to create an Appellate Tribunal in the coal sector as has been suggested in the Petroleum Regulatory Bill for the petroleum sector. On sectors specific issue like Coal it was also suggested that since e-auction has been stalled by Supreme Court there is a need to justify user classes. Market determined prices for the coal received and market driven prices for their products and services. There is also a need for augmenting competition in supplies of coal which is possible through allocation of blocks to PSUs and captive users by the Ministry of Coal.

As regards the Oil sector ,Member Energy suggested that differential duty on crude and products gives high protection to refining and increasing under-recovery claims, this anomaly needs correction. It was also suggested that there has to be a trade parity price at point of sale of petroleum products, which can be achieved through free market at refinery and retail level. The energy coordination committee also suggested that there is a need to rationalise taxes on all petroleum products so that there are no inter-state differences. Under recoveries which have been a bane of the oil PSUs can be offset by excess profit from import parity prices. On the issue of gas pricing the committee suggested that till domestic gas supply increases and meets current allotments price of gas needs to be regulated and APM gas allotted. The said pricing will be undertaken by the Tariff Commission to set upstream and downstream pricing. However the new plants will have gas only on `take or pay' and `give or pay' basis. It was also suggested that upstream gas also needs regulatory intervention for pricing . The critical issue of subsidy was also discussed with the suggestion of doing away with dual pricing and specifically targeting the actual user segment. It was suggested that providing smart cards at the subsidised price to BPL families would eliminate dual prices and leakages of the scheme. The suggestion was to provide eight cylinders to each family per year and 30 kw electricity per family every month. The suggestion was also mooted to strengthen the Bureau of Energy Efficiency (BEE) which at present is operating on a very limited budget of a seed fund of only Rs 50 crores .