The Federation of Indian Chambers of Commerce & Industry (Ficci ) has termed the country's energy outlook as bleak and warned that it could impact growth if not addressed immediately.
In a letter,Ficci president Rajya Vardhan Kanoria urged Prime Minister Manmohan Singh to revive the Energy Coordination Committee,set up in 2005,to guide government policy in the sector.
"Disparities in pricing mechanism,slow policy reforms,unattractive fiscal regime and inadequate infrastructure are some of the challenges posing a threat to energy security," said the letter,a copy of which was reviewed by ET.Earlier this year,the Confederation of Indian Industry (CII) had raised similar concerns.
"The CIICEOs delegation highlighted the need to reassess the policy framework and hasten decision-making," the chamber had said in February, after top officials of Shell, Reliance Industries, Cairn, BG India and Niko met oil minister.
The domestic oil and gas sector is concerned about inordinate delays in approvals.Private sector oil firms Reliance Industries and Essar are yet to start tapping coal-bed methane,as they are awaiting approval for a pricing formula.Coal-bed methane is the gas trapped between coal seams.In May, BP India chief Shashi Mukundan had expressed concerns over falling investments in oil and gas exploration.
"At a time when energy security is the need of the hour,with $120 billion being spent on net imports,there is a clear sign of a slowdown in the Indian Exploration & Production sector," said a letter written to top government officials.
"India's exploration spending has dropped by 90% over the last year," it added.However,officials say the oil ministry is taking steps to resolve policy and regulatory issues.The PMO recently constituted a committee to fast-track approvals in several oil and gas blocks,where development work had stalled because of inter-departmental issues.
Copyright 2012 Bennett Coleman & Co. Ltd. All Rights Reserved.
(Originally published July 23, 2012, in Economic Times.)