The deep offshore and onshore exploration activities have remained stagnant for some time now. The CII requested Jaipal Reddy, the Union Minister for petroleum and natural gas to look into accelerating these exploration activities.
The CII blames the lack of co-ordination between ministries over the exploration policy, for the considerable delay in activities.
The CII has also made a statement saying that a possible solution for this problem could be offering the blocks once all the approvals are in place.
According to a Hindu Business Line report, the CII also added that the oil and gas sector should be treated on par with each other in regards to the seven-year tax holiday under section 80IB
The CII is asking that a separate body be put in place as an industry regulator and a proper demarcation should be made between the regulatory body and policy makers.
The Indian economy will be able to manage commercial and technical risks and have more flexibility if it is willing to move into a gas-based economy, that has provisions for marketing and pricing freedom.
Another long-standing demand of the industry is that natural gas get a ‘declared goods status.’ This will help in avoiding various taxes in different states of the country. The industry is also asking that marketing for gas should be under the regulations of the production sharing contract, which gives a comprehensive idea about the market price.
India is heavily dependent on other nations for its oil needs. Investments in the domestic oil sector are less than satisfactory, where out of the 3.14 million square kilometres, only 1.6 million square kilometres have an active exploration license.