Vedanta chief moots urgent reforms to curb import dependence for fuels

Vedanta chairman Anil Agarwal on Friday called for urgent reforms in India’s oil and gas sector, including lowering taxes and expediting clearances to boost domestic exploration and production which is ‘falling every year’ because of multiple constraints, including ‘endless litigation with government’.

Vedanta chairman Anil Agarwal on Friday called for urgent reforms in India’s oil and gas sector, including lowering taxes and expediting clearances to boost domestic exploration and production which is ‘falling every year’ because of multiple constraints, including ‘endless litigation with government’.

Noting that India’s proven oil and gas reserves are three times its annual consumption, but the country still imports almost 90% of its fuel requirements, Mr. Agarwal emphasised that exploration is critical to tap those reserves and that the entire scenario can be transformed with reforms that can be undertaken within months.

“While the energy transition is going well in India, all estimates suggest that the demand for oil will double in the next 20 years from 5 million barrels per day to over 10 million barrels per day,” he said in a statement, mooting some form of production or exploration-linked incentives for the sector.

“Government is giving subsidies or incentives in all key sectors whether agriculture, electronics or pharma. But not for anything below the ground including oil and gas despite imports touching almost $100 per barrel,” Mr. Agarwal said.

Taxes add up to 60%-70% of the topline for producers, and must be brought down to “maximum 30% in line with international benchmarks”, he recommended, adding that licence tenures of 10 years also need to be reconsidered.

“Our domestic entrepreneurs have great capacity and perseverance to do this successfully and our Government is production-minded, not revenue-minded. We have a very progressive minister and I feel if the following policy changes are implemented, the entire oil and gas scenario can transform,” the Vedanta chief underlined.