Urja Sangam: PM urges nation to give up LPG subsidy

Says India must cut down oil import dependence to 50% by 2030

The government on Friday promised renewed action to tackle energy subsidy reforms.

It said it would focus on cutting down liquefied petroleum gas (LPG) leakages through direct subsidy transfer, expand piped natural gas (PNG) coverage and step up efforts to ramp up savings through energy efficiency measures.

Prime Minister Narendra Modi launched the “Give it Up” campaign, appealing citizens to voluntarily shed their LPG subsidy quota. “More than 2,80,000 lakh people have given up LPG subsidies leading to savings of over Rs 100 crore in the past 10 months of the government,” he said in his speech at Urja Sangam-2015, an international energy-focused summit organised by the oil ministry.

He also said the government had set a target of expanding the coverage of PNG from 2.7 million households to 10 million over the next four years, and hoped the steps would help the nation cut oil import dependence to 50 per cent of usage from 77 per cent now.

“India’s energy import dependence should come down by 10 per cent when India celebrates 75 years of independence in 2022. Once this is achieved, it should come down further to 50 per cent by 2030,” Modi said at the summit, which marked the golden jubilee celebrations of ONGC Videsh (OVL), Engineers India (EIL) and Rarauni Refinery of Indian Oil (IOC).

Modi praised the petroleum ministry for implementing the world’s largest cash transfer scheme, direct benefits transfer (DBT) in LPG, within 100 days. The government will now invest thousands of crores in expanding the natural gas grid network across the country, he said.

Finance Minister Arun Jaitley, who also spoke at the event, said the recent drop in crude oil prices has positively impacted the economy by helping the government rein in high interest rates and inflation. “But there are challenges ahead. Oil marketing companies (OMCs)’ inventory loses have increased as a result of the crude oil price drop,” he said, adding he hoped the prices would stabilise soon.

Due to the major decline in oil prices, the ministry also indicated upstream firms Oil and Natural gas Corp (ONGC) and Oil India (OIL) might not have to bear the burden of subsidy sharing in the fourth quarter. “We estimate another Rs 5,000 crore of under-recoveries by OMCs in the fourth quarter. All of this will be borne by the government,” a senior ministry official said on the sidelines of the summit, but clarified that no decision on the subsidy sharing formula has been taken.

Power Minister Piyush Goyal, while participating in a debate on energy security at the event, said India can save at least 10 per cent of its power consumption without any major stress on the system. “We plan to replace all incandescent bulbs in this country with light emitting diode (LED) lights within three years. This would bring down power demand by 10,000 Megawatt a day,” Goyal said.

This reduction amounts to savings of 100 billion units of power annually, he said, worth $7 billion. “This can light the lives of 280 million Indians who are deprived of electricity.” Goyal added the government was working on innovative financing models to make this happen.

The power minister, who was debating energy security with global energy expert Daniel Yergin and Andy Barrett from consultancy firm IHS, said the government was working on a $50-billion plan to strengthen the national electricity grid to avoid a 2012-type blackout due to the failure of the transmission network.