Lok Sabha passes Oilfields Amendment Bill

India’s Reliance Industries KG-D6’s control and raiser platform is seen off the Bay of Bengal.
| Photo Credit: Reuters

A Bill that seeks to amend the existing law governing exploration and production of oil and gas as well as delink petroleum operations from mining operations was passed by the Lok Sabha on Wednesday (March 12, 2025).

The Oilfields (Regulation and Development) Amendment Bill, 2024, is aimed at boosting investment in the sector. The Bill was passed by the Rajya Sabha in December last year.

Replying to the debate before the passage of the Bill, Union Petroleum and Natural Gas Minister Hardeep Singh Puri said India is the only country in the world where in the reference period of the last three years, the prices of petrol and diesel have actually come down and this has been possible because “the Prime Minister reduced the central excise (duty) on two occasions”.

Mr. Puri said that Congress-ruled States have increased VAT (Value Added Tax) on petrol and diesel.

“He also noted that fuel prices in neighbourhood countries are 15% to 25% higher than in India. Equally, prices in western Europe and the U.S. are much higher than in India,” he added.

“The oil Bill aims to resolve one of the biggest grievances of global oil companies interested in investing in India by providing stability in operation, both in terms of tenure of the lease and the condition. The Bill also does not alter the rights of the States, which will continue to give petroleum leases and receive royalties as before. The Bill also does not alter the existing level-playing field and offers no preference to either the private or the public sector,” the Minister said.

Among others, the Bill aims to decriminalise some of the provisions of the original Oilfields (Regulation and Development) Act, 1948, by introducing “penalties, adjudication by an adjudicating authority and appeal as against the order of adjudicating authority”.

Earlier, initiating the discussion from the Opposition side, Congress MP Manish Tewari said the draft Bill lacked vision and a road map.

Referring to oil imports, Mr. Tewari claimed that India was not “future ready”.

“What is required is a road map to make India energy sufficient, which unfortunately is completely missing. What is the government planning to do to encourage independent oil explorers? Is there anything in the Bill that incentivises them,” Mr. Tewari asked.

He said according to estimates, there is 96 trillion cubic feet of gas and one billion barrel of shale oil in Cambay, Krishna Godavari and the Kaveri Basin. “What has the government done in the past 10 years to tap the potential of shale oil?”

“This Bill is not coming as if this government was sworn in yesterday. This Government has been in office for 11 years now. So, I would like to ask what this government has done with regard to trying to explore shale oil and gas, which incidentally has made America almost self-sufficient in so far as their oil and gas needs are concerned?”

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