Energy remains under priced in our country, says PM

Prime Minister Manmohan Singh Monday favoured phased rationalisation of energy prices to bring it in line with global levels and curbing energy subsidies to achieve the targeted rapid, inclusive and sustained growth.

Kochi: Prime Minister Manmohan Singh Monday favoured phased rationalisation of energy prices to bring it in line with global levels and curbing energy subsidies to achieve the targeted rapid, inclusive and sustained growth.

He said the central and state governments must work together to create awareness among the public on the need for 'curbing' energy subsidies.

"Energy remains under priced in our country, with coal, petroleum products and natural gas prices well below international prices. To meet our target of rapid, inclusive and sustainable growth we must undertake a phased rationalisation (rpt) rationalisation of energy prices to bring them in line with world prices," he said.

Laying the foundation stone of the Rs 20,000 crore BPCL- Kochi Refinery's Integrated Refinery Expansion project at nearby Ambalamugal, Singh said adequate supplies of energy at affordable prices was needed for the country to achieve its target of rapid growth.

Noting that the country was dependent on imports to meet major portion of its crude oil requirements, he said large- scale investment was required for exploration of oil and gas within the country as also acquisition of overseas assets in the sector and strengthening of the marketing and distribution infrastructure.

The government was committed to encouraging companies to undertake domestic exploration for oil and gas and the public sector companies were also looking at opportunities abroad.

The BPCL had made some significant successes in the upstream exploration and production sector, particularly in Mozambique and Brazil, he said.

The prime minister said with a refining capacity of 215 million metric tonnes per annum (MMTPA), the country today was not only self sufficient in meeting its demand for petroleum products, but was also making substantial exports.

During 2011-12 India exported 60.8 MMT of petroleum products worth Rs 2,85,000 crore, making the petroleum products single largest merchandise export.

Singh said he was happy that the oil industry had undertaken the massive task of upgrading the quality of auto fuels at an investment of over Rs 30,000 crore from internally generated resources.

Bharat Stage 4 petrol and diesel have already been introduced in 26 cities and would be extended in a phased manner to cover another 37 cities by 2015, he added.

On completion of the expansion at Kochi refinery, the refining capacity will increase from 9.5 MMTPA to 15.5 MMTPA.

The project would contribute to efforts towards energy security by enhancing the supply of kerosene, LPG, Petrol and diesel, Singh said.

Pointing that the project will have many 'multiplier effects' for Kerala's economy, Singh said he was happy to know that the state government was planning to bring downstream ancillary industries to the nearby areas. This would further boost the local economy and provide additional employment opportunities, he said.

The prime minister said the UPA government had "always strived" for development and progress of Kerala.

"We wish to see Kerala live up to its immense potential."

During the last eight years, the Centre had initiated a number of projects, including the Vallapradam International Container Transshipment Terminal project, Ezhimala Naval Academy and Brahmos Aerospace which would benefit the state in its quest for rapid economic growth, he said.

"We need to leverage Kerala's unique strengths to attract investments to the state. A high-level of social development, a very high quality of human resources and the commitment of the state government to provide a clean, transparent and efficient administration strived" are only some of these strengths," he said urging the state government and all other stake holders
to make all possible efforts towards this end.

Recalling that Kochi Refinery was dedicated to the nation by late prime minister Indira Gandhi in 1966, he said it had maintained an excellent record of performance.

Petroleum Minister M Veerappa Moily said by 2016-17, a total of 31,757 km of pipeline will be laid for smooth flow of gas throughout the country.

The Gail pipeline network between Kochi and Mangalore will open up great avenues for development of industries.

Shale gas has opened up new avenues in unconventional source of gas which can make India self-sufficient. Shale gas policy has changed the face of US and this can be replicated in India, he said.

"We must strive for complete energy independence by 2030 which is very much possible. I am already working on a detailed road map having well defined action plan so that import dependency is reduced by 50 percent by 2020 and 75 percent by 2025 and 100 percent by 2030," he said.

Chief Minister Oommen Chandy said the government was committed to establishing a petrochemical park to attract further downstream project.

Kerala Governor H R Bharadwaj, Union ministers Vayalar Ravi, K V Thomas and Lakshmi Panabaaka and BPCL CMD R K Singh were among those present.