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The original sin of no pricing policy...
The author warns that some readers may be disappointed if they had prejudged the corporates as the reason for the rise and fall of the nation’s oil and gas sector.

Not only was I not disappointed with the book, but I also found it and engrossing. Jayaswal has given a dismal picture of oil industry politics, which seems to have paralysed decision-making.  The author argues that decision makers were afraid to take the right decision like increasing the gas prices, resolving PSC related disputes, etc., lest they are criticised for favoring some companies.

Towards the end, the author quotes Moily’s surprising, shocking, unbelievable comment that ‘import lobby’  is threatening all the oil ministers. But Moily did not reveal the names. The author also could not speculate who this import lobby could be. 

Jayaswal has profusely complimented all the ministers except Jaipal Reddy and secretaries. But if one looks at their performance, do they deserve the praise? Take Moily? Is he a visionary? When he increases LPG quota first to please Sonia Gandhi from 6 to 9 and then to 12 at the order of Rahul Gandhi did  he not make a mockery of the strategy? 

The author praises Mani Shankar Iyer and Murli Deora for the ‘interest’ they took in “Asian Premium” which they do not deserve. Both were misinformed by their advisors. Asian Premium was a result of market dynamics beyond the control of the exporting countries and not a deliberate ploy as was implied when Deora took it with the Saudi King. 

 

PSC under NELP gave oil companies total freedom to price and market the gas to attract investment. However, none of the ministers had the guts to support that clause. Not having the right pricing policy is the original sin, which continues to affect the sector today. As a result, energy dependence has continued to increase. This issue of pricing is discussed in several places though not with sufficient depth. 

How could a company like Reliance sell gas at fixed price for 20 years ($2.34) to NTPC? They just wanted to establish a low benchmark market rate, which can be used to sell gas to its subsidiaries. What a ploy it was! This important topic got only a  cursory mention.  

 

How could everyone be misled?

Sale of Cairn to Vedanta should have been such a straightforward deal. In the first place, how could payment of royalty by a public sector company not be treated as cost recovery? This shows the incompetence of those who negotiated PSC. How could everyone be misled by the so-called penalty of not allowing full cost recovery? This issue has been discussed well.  

There is no mention of GPSC at all in the book. Is this an oversight? Only in passing  GeoGlobal and Jubilant, who seem to have taken GSPC for a ride, are mentioned in the book. The author could have discussed their suspicious roles in the development of the KG basin, another shameful chapter in India’s oil history.   

The book throws light on how dysfunctional political decision-making has resulted in policy paralysis. But surprisingly it praises most of the major players in the oil sector, which is puzzling!  Still, I wish that political science, journalism, and legal departments in all universities in India can use this book for mandatory reading. Our younger generation should learn how our generation has failed them. 

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