Need to do away with red tape for sector to grow: Vandana Hari

It is a difficult question you have asked me, but let me give it a shot. I would say overall on a scale of one to five in terms of the government’s performance in the energy sector, I would probably rate it 3.5.

There are three clear wins in my view. First, the way the government has navigated the external geopolitical turmoil. And by that I mean specifically the Russian invasion of Ukraine in 2022.

Second, I would say is COP28 and in general the dialogue that is happening on the international stage with regard to energy transition. I think India has come into its own.

Third, the government has done well in giving a major push to the city gas distribution network.

I want to give it as a two-part answer — one is the downstream pricing reforms, getting rid of the fuel subsidies.

But looking at the past two years, I would say it was doing everything needed to facilitate Indian refiners’ access to discounted Russian crude.

There are a few areas in which I would say the work is unfinished.

The first that comes to mind is upstream reforms. The government has taken steps in terms of trying to attract upstream investment. But it has not fully succeeded. I think an area that needs much more attention is reducing red tape.

There are long and cumbersome processes of getting approvals from the central, the state and local bodies before a company can even begin prospecting in a new block.

Then there is the need to address issue of taxes and levies. India’s oil producers after paying all the levies, the royalty, the government’s share of profit petroleum, are left with barely a third of their income. It is not very conducive to investment. Also, I would say it is high time that the windfall profit tax on crude that was introduced a couple of years ago is gotten rid of.

The government should also accelerate the build-out of the Strategic Petroleum Reserve. India has made a late start on this front and needs to catch up quickly now.