Parliament clears Bill to amend law governing oilfields development

The Bill, which was cleared by the Rajya Sabha on December 3, 2024, received final approval from the Lok Sabha on Wednesday. Minister for Petroleum and Natural Gas Hardeep Singh Puri, while presenting the Bill in the lower house, assured that it does not alter the existing level-playing field between public and private sector players.

“The Bill addresses one of the biggest concerns of global oil companies investing in India by ensuring operational stability in terms of lease tenure and conditions. Importantly, it does not alter the rights of the states, which will continue to issue petroleum leases and receive royalties as before,” Puri stated.

One of the key aspects of the amendment is the decriminalisation of certain provisions in the original Oilfields (Regulation and Development) Act, 1948. The Bill introduces penalties, adjudication mechanisms and an appeals process instead of punitive legal measures. It also expands the definition of mineral oils to include crude oil, natural gas, petroleum, condensate, coal bed methane, oil shale, shale gas, shale oil, tight gas, tight oil and gas hydrates — a move aimed at boosting domestic output and reducing reliance on imports.

During the discussion, Congress MP Manish Tewari criticised the Bill, arguing that it lacked vision and a clear roadmap. “This Bill makes only minor technical changes. What’s missing is a long-term strategy. India imported 87.8 per cent of its crude oil and natural gas in 2023-24 and that figure could be close to 90 per cent today. What has this government been doing for the past 10 years to reduce our dependency on oil and gas imports?” he questioned.

Responding to the criticism, Puri defended the government’s record, highlighting that India is the only country where petrol and diesel prices have actually decreased over the past three years. He credited this to Prime Minister Narendra Modi’s decision to cut central excise duty twice, while pointing out that Congress-ruled states had instead increased VAT on fuel.

“Fuel prices in neighbouring countries are 15 to 25 per cent higher than in India, while Western Europe and the US have significantly higher rates. This government has worked to stabilise fuel prices and strengthen energy security,” Puri said.

Later, in a social media post, Puri hailed the passing of the Bill as a ‘historic day’ in India’s pursuit of energy security and self-sufficiency under Prime Minister Modi’s leadership.

“These amendments will further strengthen India’s energy sector by ensuring policy stability, international arbitration mechanisms and extended lease periods,” Puri wrote.