Rajya Sabha passes Bill to delink petro from mining

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CategoryPolity

Last Updated05/12/2024

The Rajya Sabha passed the Oilfields (Regulation and Development) Amendment Bill aimed at delinking petroleum operations from mining operations, broadening the scope of the expression “mineral oils” and introducing the concept of “petroleum lease” among other provisions.

The Rajya Sabha has approved the Oilfields (Regulation and Development) Amendment Bill, a move aimed at modernizing petroleum operations by delinking them from mining activities, redefining “mineral oils,” and introducing the concept of a “petroleum lease.”

The Bill, presented by Oil Minister Hardeep Singh Puri, seeks to:
Establish stable terms for granting petroleum leases.
Strengthen petroleum operations through clearer rules for leases, licences, and renewals.
Encourage foreign and domestic investment by creating a business-friendly regulatory environment.
Introduce penalties in place of criminal provisions under the previous Act, facilitating dispute resolution.
Foster energy transition while ensuring safety at oilfields.
Mr. Puri emphasized that the legislation aims to benefit operators, investors, and states, assuring that petroleum leasing would remain under state governments' purview.

During the debate, opposition members raised concerns regarding federal rights and the economic impact of the Bill:
- Federal Concerns: DMK MP N.R. Elango argued that changes such as replacing "mining lease" with "petroleum lease" might undermine state rights. He suggested sending the Bill to a select committee.
- Corporate Focus: Several opposition MPs, including those from the CPI and AAP, accused the government of prioritizing private corporations over public sector enterprises like ONGC.
- Consumer Impact: Opposition members criticized the government for failing to lower fuel prices despite decreasing crude oil costs, referencing earlier promises to reduce petrol prices to ₹50 per litre.

Responding to criticism, Mr. Puri clarified that the Bill does not intend to privatize the sector but to ensure efficiency and transparency. He emphasized that state governments retain authority over granting petroleum leases and reiterated the importance of the oil and gas sector for India’s energy needs over the next two decades.

The Bill signals a shift in India's energy strategy by incentivizing private and foreign investment while addressing energy transition goals. However, the debates highlight the need to balance federal interests, public sector priorities, and consumer welfare in the sector.