Union petroleum minister Janeswar Mishra yesterday said he had virtually given up hopes of getting back the Rs 4,300 crore loan taken by the finance ministry from the oil pool account.
Expressing concern over the burgeoning oil pool deficit, Mishra said: Nobody should touch the money of the petroleum ministry. We are an earning department and we need money for the financial security of the oil corporations.
If anybody touches our money (oil money reserves), it could have a devastating effect on the countrys oil economy, said the minister in an apparent reference to the loan taken by the finance ministry during V P Singhs tenure as Prime Minister about a decade ago.
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Asked if he would seek repayment of Rs 4300 crore from the finance ministry to reduce the Rs 17,500 crore oil pool deficit, Mishra said his ministry would talk to the finance ministry and register its objections.
But do you really think it is practical to expect the money back after 10 years when the finance ministry could always say it had spent the money on development, roads and hospitals, asked Mishra.
The minister admitted that Indian Oil Corporation, the countrys only importing agency, is faced with a predicament in securing further oil supplies from abroad because of its heavy borrowings, amounting to Rs 14,000 crore, besides its overdues of Rs 9,000 crore from the oil pool account.
Under the present circumstances, imports may dry up, he said.
We are working on various ways as to how the oil pool deficit is to be met and are seeking to devise measures so that new loans are not created, added Mishra. Indias oil supply has come under pressure not only from the import front but also on the domestic production side, he said, adding that the Bombay High oil fields were on the verge of exhaustion.
While finalising a $400 million short-term oil import facility with the Bank of America and State Bank at Hong Kong in February, the IOC had warned that it would not be possible to raise resources economically in the given scenario. We will have to think in terms of going deeper into the sea for exploration for which the country will necessarily have to develop or acquire technology, said Mishra.
The government is also reportedly working on major tax incentives, including higher depreciation and corporate tax concessions to attract fresh foreign and domestic investment in the petroleum sector, besides formulating a new oil code.
The countrys oil import bills were up by 41 per cent at nearly $9 billion in 1996-97. IOC exhausted as much as $2.2 billion out of its $2.9 billion external commercial borrowing (ECB) limit.
Although the countrys oil economy budget is yet to be finalised, the expectations are that the import bill will go up further in view of the ever-increasing demand coupled with domestic production shortfalls.
Mishra, who took over as cabinet minister about a month ago, has held detailed discussions with senior officials of his ministry on ways to bring the oil economy back on the rails.
Stressing that he would take all possible steps to achieve self-sufficiency, the minister said India procures cheap oil by allowing Indian companies to enter into joint ventures abroad for oil exploration and production.
On the domestic front, Mishra highlighted the law and order problems in the oil-rich North-East and said despite the full support from various state governments like Assam and Arunachal Pradesh, production was being impeded and possibilities were being explored to sustain output levels.