Mani Shankar Aiyar critical of oil ministry policies

In an apparent dig at his successor in the oil ministry, former petroleum minister Mani Shankar Aiyar today said policies aimed at settling the Ambani gas dispute has driven away foreign oil and gas explorers.

Aiyar, who was petroleum minister from May 2004 to January 2006, said that the nation was "more energy insecure" as a result of policies being pursued currently.

Without naming incumbent oil minister Murli Deora, Aiyar said the government had intervened in the gas dispute between Mukesh and Anil Ambani to establish its right to fix price as well as users of gas.

As a result, "the internecine fraternal quarrel is over, but present and potential explorers have quit India in droves," he said delivering the Lovraj Kumar Memorial Lecture.

Aiyar, who has been highly critical of the way the Delhi edition of Commonwealth Games is being organised, said: "To resolve a quarrel between two brothers, the government have intervened to remind themselves that natural gas constitutes a sovereign national resource.

"Therefore, gas shall not be marketed at a price lower than the minimum fixed by the government; prices may be determined prospectively or retrospectively; and sectors to which the gas must be sold in the first instance will be determined by the government."

This has resulted in a situation where natural gas producers "can neither determine prices nor customers," he said.

"We need an explorer-friendly exploration policy if domestic natural gas output is to surge," he said, adding that only on increasing domestic output can the nation of more than a billion people cut its reliance on imported oil and gas to meet its energy needs.

India imports more than 75% of its crude oil needs and about one-fifth of its gas needs.

"Instead, alas, we are doing practically everything we can to discourage international and even domestic players from entering our uncertain, deeply ambiguous hydrocarbons sector, thus massively promoting energy insecurity," he said.

"Not till there is guaranteed stability in our natural and shale gas exploration, exploitation and marketing regime, along with a truly transparent and independent regulatory authority, will domestic natural gas,  the fuel of the 21st century, save us from the plunge into the abyss," he added.

Aiyar said the 21st century was touted as the century of natural gas but "instead of making this profound observation the drumbeat of our march to energy security, we have so twisted and turned natural gas policy, both with respect to internal production and distribution and with respect to imports from abroad, that we are today more energy insecure than we were in 1996."