Slips and Hits of India’s Oil & Gas Story | ft.  Jyoti Mukul

[Podcast intro]

Welcome to the season five of the India Energy Hour podcast. This podcast explores the most pressing hurdles and promising opportunities of India energy transition through an in depth discussion on policies, financial markets, social movements and science. Your hosts for this episode are Shreya Jai, Delhi based energy and climate journalist and Dr. Sandeep Pai, Washington based energy transition researcher and author. The show is produced by 101 reporters, a pan India network of grassroots reporters that produces original stories from rural India. If you like our podcast, please rate us on Spotify, Apple Podcasts or the platform where you listen to our podcast. Your support will help us reach a larger audience.

The oil and gas sector in India has been a story of evolution from once private entities turning into nationalised companies and then again the entry of private sector in 1990s. Initially, the upstream oil exploration sector witnessed a lot of private investment but then it slowed down. The downstream oil sector simultaneously saw a variety of social schemes, billions of government funds, and private investment from marquee names. The natural gas sector, on the other hand, is a story where import dependence has only increased over the years, making the supply to key sectors, like power generation difficult, since imported gas price cannot match the cost advantage of coal. At the same time, India is aspiring to be a gas-based economy. Mega scale city gas distribution and piped gas network expansion is also under works. In the middle of this, ethanol blending programme for petrol has taken off well. Simultaneously, a pilot project on green hydrogen blending with natural gas has also started in Madhya Pradesh.

To unwrap the past, present and what could be the future policies and plans for India’s oil and gas sector, we talked with Jyoti Mukul, a seasoned energy infrastructure writer. Ms Mukul was a journalist for nearly three decades and has followed milestone developments of the country’s energy security and transition efforts. She is a well-known policy analyst for energy and infrastructure sectors and her first book ‘The Great Shutdown: A story of two Indian Summers’, highlighting the infrastructure challenges posed by the Covid pandemic, came out in 2022.

[end]

[Podcast interview]

Shreya Jai: Hello, and welcome to the India Energy Hour. We have a very special guest today with us, at least special for me. This is a person whom I’ve worked with at least eight years, has been my guide and mentor. We have with us miss Jyoti Mukul, who has been a prolific journalist and writer in the energy infrastructure space. I’ve had a very special journey with her. She herself had had a stellar journalistic career, which saw some of the biggest milestones in this country’s economic growth. So welcome to the India Energy Hour, miss Mukul.

Jyoti Mukul: Thanks Shreya and Sandeep.

Shreya Jai: Just before we delve into this very important issue that we will discuss, I thought that you could tell your journey on your own. I’m sure I won’t do much justice to it. You were a journalist for more than two decades, with a special focus on India’s energy and infrastructure landscape. So can you share with us about your professional journey? Where are you from? What did you study? Were you one of those accidental journalists, or was it a choice? And how did it fare covering energy and infra for so long?

Jyoti Mukul: So Shreya , back then, you know, in 1994 when I joined journalism, of course, I joined journalism from a journalism school that is Indian Institute of Mass Communication, from their, Delhi, branch. That time, they had only Delhi, and then they were opening that year for Bengal as well. So I opted for Delhi because I was Delhi based. And then, when we graduated from, IMC, we applied for internships first because one month of internship was required to get our diplomas. At that time, they were offering diplomas in PG diplomas in journalism. I was in the class of English journalism. And then instead of our internship, I, and a lot of my batchmates, we got a job in a paper called the Asian age, which was being launched. And, they took some, if I remember correctly, a dozen of us, into their four. And, that time, we were pretty excited, and, I’ve I got a salary, if I remember correctly, of a princely amount of 3,500. And I was so excited about that that I thought, oh my god. What will I do with so much money? So, then we joined and, since the paper was new, I don’t remember. Was it already launched or was it launched after we joined?We had to work, you know, all seven days of the week, and it was pretty grueling. So I joined on the desk care of Asian agent after maybe six months or so, I applied in, Financial Express. And, that was the start of my career in a business newspaper and as a business journalist. The I would say it was just a coincidence that I got a job in Financial Express, because, you know, Asian age, when it was launched, it had the latest technology in printing and newspaper making. And I knew the software on which I could operate the software. I was doing pages there and making pages, giving headlines, and the other editing work. So I got a job in Financial Express because I knew QuarkXPress, you know. Nothing, at that point of time, was part of journalistic, you know, factor was in my CV or except that I knew how to operate QuarkXPress quite well. And, so I was hired as he was introducing this software and all that. And for ten long years, I was in. Then I moved to business standard. And after working there for some time, I joined the DNA. From DNA, I went to the Financial Chronicle. Again, Financial Chronicle and even DNA was a newspaper new newspaper, and the Financial Chronicle was being launched, and I was taken in as chief of bureau, because of my experience, and also because of the experience of handling a lot of deeds. You would be knowing, that’s, you know, to have a view of a lot of sectors helps in, you know, enriching the copies the journalists write. And therefore, I was taken as chief of bureau where I worked for about one or one and a half year. I don’t remember exactly. And then I was back to business standard again for twelve long years. Of course, I quit journalism in 2022, but journalism itself has changed a lot. As I told you, I was hired because I in a fee because I could operate a software, and then those were cut pastimes. So, the there was, there were no web editions of newspapers. There weren’t videos or anything which print media was doing. So journalism has evolved a lot since, back then.

Sandeep Pai:  Fantastic. Thanks for sharing this. I just wanted to understand, like, how you as your career unfolded from the times, till until 2022, have you seen some historic events that unfolded your career? What were some of the key events that actually shaped your own thinking?

And I  think and then your book came out, and it talked about COVID and Indian infrastructure. So, if you can explain some of the events that may had a major impact on your career.

Jyoti Mukul: Since Sandeep, as a young reporter, you know, I switched from desk job to a proper reporting job in 1997. Yeah.1997. Three years I was on desk. And, so, when I moved to it’s, you know, people who are in journalism would know and, whether it’s a newspaper or a magazine.

The transition from being a desk person to being a reporter is not very easy. In fact, I believe in other countries, it’s people people become reporters first and then they, you know, go on to be in the desk. But, that time in India, there’s not much, you know, thinking which goes into who will join a desk or a reporting job. But I would say I’d really learned a lot and it helped shaping my career when I started off from the desk. Learning how to edit copies, learning how to, you know, give headlines, and which I think is a very essential part of, print media, in in in electronic, probably the liners which go are important, but in print, it is very important to have good, correct, precise, and eye catching headlines. So this is what I learned. I learned how to edit copies and, then, I moved on to reporting with the I started off by writing features, on, small and medium industry at that time. You know, the definition of small and medium industry also got changed and Financial Express launched a full page on MSMEs. So what happened during that period was that, because I was part of this team writing on MSMEs, I got a very good view of various sectors in which MSMEs operated. So, one day, I was visiting, atta flower mill and writing about the different kinds of attas which are available. And then I was, one day going to Sarangpur and writing on the, wooden, wood based industry, the carvings, and the and the art which Saranpur offers in terms of wood products. So it gave me an, training in, you know, doing ground based reporting as well as going to the proper factory or a site to see what happens and then report back. Normally, in a policy reporting kind of a scenario, which most of my career was, and she has also done that. What we do is we go to the ministries, we talk to industry, and then based on their inputs, we write. But, this early stage training helped me in, you know, training myself in writing a narrative, which I think, really, helped my writing skills. And then when I moved to the daily bureau, my first beat was infrastructure in which I was doing roads, railways, and shipping. And railway, as you, there is no is a kind of a microphone for the Indian economy. They move cargo, which is coal and food grains and cement and things like that, apart from the passengers, and therefore, it helps you to understand these commodities very well. Railway also helped me in knowing how to read a budget because the railway used to have its own budget earlier. It wasn’t very exactly similar to the general budget, But the way accounting is done, I was government accounting is done, I was able to understand through this beat, railway beat. And then, of course, I started writing on energy, as well when I joined business standard, I think in 2002, if I remember correctly. No. Sorry. In 2004. Then, we, you know, we also when I was in FE, I witnessed dismantling of, administered price mechanisms in the oil and gas sector. Now that is a very big thing that time because, you know, a decision on APM dismantling was taken by the cabinet much earlier than the exact deadline was, 03/31/2002. It had to be dismantled. But there was lot of political, you know, these decisions are very tough to give, a way to control pricing and go towards market pricing. So except for four products, which was a petrol l p diesel LPG kerosene, these four sensitive products which government of India call them, rest of the petroleum sector was decontrolled. And, then, it was decontrolled in the sense that in, or technically,  the pricing the companies were free to set their pricing, but the government controlled the way they price the products, which is like they introduced this fortnightly mechanism of calculating price for diesel and petrol. And for LPG and kerosene, it was done on a monthly basis.

So they were indexed to a certain basket of international, central international indices. And then every fortnight, the price was to change. But, they were not exactly changing also because, sometimes, government wouldn’t allow the companies, oil marketing companies, which our government owned, to increase the price. This was done mainly unofficially. So that thing happened and happened, and it kept going on till 2010 when petrol prices would completely decontrolled and the phase decontrol of diesel prices. Also, diesel, mind you, is more sensitive product when it comes to, you know, impact on inflation, impact on prices of other commodities. The therefore, diesel was done in a phased manner. And in 2014, when the current political regime came to power first time, they, they, they were, they took the benefit of, very low prices. So the phased increase in diesel prices ended up in 2014 to be a fully market driven price in diesel. But as Shreya and Sandeep, you will know that, still a lot of behind the scenes, control of prices is done by the government. And later on, you know, there was this daily pricing, and now there is no official declaration of petrol diesel price. Also, one another interesting thing which happened, which I saw and brought about was the direct benefit transfer in LPG, which happened sometime, if I remember correctly, in 2015. That was also very, major strength in the sense and since instead of, subsidized LPG cylinder, you were getting a subsidy in your bank account, through direct benefit transfer. And certain, certain consumers were not eligible for that. There’s an income criteria. Anybody earning more than that in a year does not get this DBT done benefit. So that was another. And if I look at the infrastructure side and my reporting career, that’s a huge, huge controversy when railway zones were created. Now, now people would say, oh, oh, what’s so controversial about it? But, it was a huge thing, and, I remember Nitish Kumar was the, rail and  minister then, and he was under a lot of political pressure, because there was a lot of resistance on creating more railway zones. So I think, seven new railway zones were carved out of existing zones, and I think this happened sometime in 2002. Though the decision to create railway zones were based on a railway reforms committee report, which came sometime in ’96 or ’98. So it took real, a lot of political, and there was a backlash from the railway railway workers themselves who didn’t want more zones to be created. So that was another thing, broadly, which I remember. Of course, roads, you know, the roads were the build operate transfer, roads were built on the that model. That also happened during watch by government, and I remember one of the first, segment and a and a model of a contract was put in place, when Jaipur Kishan guy was done. That was the legendary project which NHI awarded, and that contract became a model contract for other BOT projects. So we would also, there was lots happening. So these were, I think, the the big events during my reporting days.

Shreya Jai: That’s that’s absolutely fantastic. Thank you so much, for sharing that. And I think that sets the tone for us to, dig into our topic for today, about the past, present, and future of the India’s oil and gas economy. So, it has been one hundred and thirty six years since India dug its first oil and Tigray. But even after these many years and several policy initiatives, why are we not a powerhouse in hydrocarbon production? And in the same breath, if you can address that, why global majors have all have always shied away from the Indian market?

Jyoti Mukul: So Shreya, hydrocarbons, you know, exploiting hydrocarbons under the earth, under, your ground, is a very, complex, exercise. You, could also say that it all depends on how, naturally a company a a country is endured with the oil and gas resources. Like, for instance, India has good coal coal reserves, you know, that you have written on coal and power, yourself also. But, we don’t have, you know, we are not so rich, if we if I compare to coal, you know, in that sense. We do have a lot of oil and gas and lot of rounds of oil auctions have happened. We do produce, Bombay high is a very good field which was, discovered early on in India’s oil and gas discovery. Of course, Digboi was long back, but then, we have a lot of oil and gas coming from even, even our, eastern, area Eastern fields of Andhra Pradesh as well. There’s a river field of, of Andhra of the coast of Andhra Pradesh. So similarly, there are pockets where oil and gas were found and were produced. But if you have to compare to, say, world’s, richest oil and gas, come countries, which are there in Middle East and also US has also got good resources, we are not we do not have that many resources as per the understanding. And, you know, a dollar invested in in, Middle East or in or or even in, very rich, oil and gas, areas in Russia will probably give you more returns than they will probably in India because, you’ll probably have to drill more, and the returns may not be enough. There’s a concept in oil and gas, exploration, which is called marginal fields. Those fields are smaller fields where the production the reserve quantity and the production quantities, volumes are very low. So sometimes big companies like OGC would find them, very, not very lucrative to do business because Owing is a big company. The cost of production is probably higher. So they they tried monetizing these marginal fields to, smaller players who can, you know, give them better return, give them a share in the marginal fee production. Those kind of arrangements were thought of and in some cases done as well. So, I would not say that we can be a powerhouse in oil and gas simply because we do not have so much oil and gas under our ground, and therefore the import dependence continues. And, of course, now if I if I look at oil and gas sector, the interest a lot of companies are moving. A lot of energy joints are joints are moving away from, away from these fossil fuels. You know? So so they they are only marginally investing in these kind of they have taken a conscious decision that we will not invest in oil and gas. Some companies have started focusing only on natural gas and not so much on crude oil. So these kind of, decisions are globally taken by some companies one, and you know that they are transitioning to, renewable energy to if if if it was an offshore field, they are looking at, offshore wind, you know, from the same, infrastructure which they have created. They would they want to put up, wind turbines and use that for wind generation. So so that the I would say that, the the outlook towards, how to invest or the investment outlook towards oil and gas has also changed a lot from what we have seen in, nineties and e even in February, where companies used to invest a huge amount in oil and gas.

Sandeep Pai:  Great. Very interesting how you explained the upstream. I just wanna go to the downstream of things. So if you can speak about, like, how India’s refining sector evolved, I think it’s pretty big, and what’s the size? Is it still growing? Because India’s appetite for all energy is growing. So just curious about your thoughts, on that.

Jyoti Mukul: Yeah. So, Sandeep, India’s refining sector. Yeah. And if you compare it to the, the upstream part, is, is a contrast in the sense that we have done pretty well in refining capacity, and we are exporters also. So it’s a very heartening story there. I think the refining capacity is, somewhere around, two 57 or 58 million tons per annum now. Now the thing is that, in in in refining sector, we have seen that, earlier, of course, there was dominance of, PSUs in dominance, meaning they were there was the market was also not open to private players at that point of time. So, a lot of companies, the post dismantling of APM in 2002, started commissioning their refining, you know, capacities. And, then you had, the biggest, of course, which came up in the private sector was Reliance Industries first, the refinery in Jamnagar. Later on, they commissioned another refinery in Jamnagar itself. SR came up with the avoiding our refinery. So there were private sector players who came in. And, Indian re PSU’s also expanded their refinery capacity, did some greenfield refineries also, joint venture refineries, like, HBCL metal refinery in, Punjab came up. So that’s how capacities came up. And also one interesting thing, Sandeep, which happened in the refining sector is that refiners also branched out to petrochemicals, you know, which is further downstream. And, they added capacities there. So India does, export a lot of petrochemicals as well apart from petroleum products.

Shreya Jai:  Alright.  But, you know, in terms of refining, we are pretty big. We have been called a refining giant despite the bottlenecks in terms of reserves. How did this situation shape up? It’s pretty ironic, or is it not?

Jyoti Mukul: So Shreya, what happened was that our refining capacities increased. It may sound ironic, but we import the crude oil. So a lot of the refining, which we do in India, I think the percentage is about 80%. The crude oil comes from, we imported. About 20 or less than 20, we are domestically producing the crude oil. So, it is an import, import dependent, industry, the refining sector itself. So the thing is that, refining, now with both the domestic market. What is happening is, earlier we used to import products as well. No petroleum products, petrol diesel, especially LPG, continues. So even now we, import some LPG if I’m not wrong. But because we became so self sufficient in refining and imports of products declined. And instead, we became exporter of, petroleum products. At one point of time, and I’m not very sure whether we’ll have to check the figures on that, Petroleum products were the biggest, export products, of India, you know, in, gems and jewelry and, they they had beaten gems and jewelry and, they they they in terms of value, they, they the biggest exports from India. So it may be an import dependent, sector, but we were capturing the export market. And therefore, this value addition, which we do through refining, helps us. It created jobs. It created, a good situation for us in the in the trade balance. Those things happen. And, also, you know, oil marketing companies who are also refiners sometimes, take a call. If the Indian market pricing is more beneficial for them, the product pricing, then they push more products in the domestic market. This I’m talking about private refiners mainly because the PSUs are obligated to, sell in the domestic market. And if the private refiners find that their products are getting better price overseas, they push in the export market. So that’s how it’s working.

Sandeep Pai:  Right. Jyoti, I have one one question. As you explain the landscape of upstream, midstream, and how they have evolved, like, I have read and obviously I’ve followed how Indian government’s fiscal dependency on oil and gas taxes and how big they are and so on. How did that happen? If you wanna share kind of in some detail about what is this fiscal dependency, how does it manifest at the federal level, and are there any subnational or statewide dependency as well?

Jyoti Mukul: So, Sandeep, you’re right. There is a lot of dependency, fiscal dependency on the petroleum sector. And, the reason, of course, would be because of the, high value items which are being, you know, which which are there in the sector. So whether it is ATS or petrol diesel, of course, is a common man thing, but there are also other, refining products which, are sold in the country. So these kind of things, of course, give government a good revenue. So, there was a time when, you know, there was this whole debate on, whether the taxation on, petroleum products should be a fixed, number or ad valorem basis. Ad valorem basically means a percentage of the price of that product is being taken as tax. So, what used to happen was each time the each time the price increased, and this happened more when the prices were, slightly decontrolled and fortnightly price increase was happening, each time the base price would increase, the percentage increase in government, revenue would also increase automatically, supposing it’s a 5% or a 10%, tax excise duty. Then, and the base price of the petrol and diesel increases, the government revenue automatically increased. So I remember, clearly, it was, Peter Dambram in the finance minister who introduced a combination of fixed, tax, you know, value and an ad valorem value or percentage value. Both so a certain portion of the tax excise duty was fixed, in terms of, rupee 1 or rupee $2.03. I don’t remember exactly how much. And then a certain, portion of the, excise duty was in percentage. So, that’s how, the, the taxation was reformed so that so that, you know, there’s no cascading effect in the eventual price and the benefit of high product prices, does not, you know, unfairly go to the government as well. So that’s how it was doing done. And if I understand correctly, globally, also countries charge their petroleum products a lot of tax, and they are good source of government revenue. Now when it comes to, say, state governments, you asked about subnational. So you know that five, petroleum items, which includes, crude, which includes natural gas, petrol, diesel, and, ATF, they are outside the the goods and service tax regime. So what happens is the states are taxing, charging their own VAT, and the government, union government taxes, charges and excise duty. So they are out of the GST regime, and the states are not very keen to bring, these five items into the GST regime simply because their revenues will be impacted. You know, come what may be the demand the demand of, liquid, products, like petrol and diesel, roughly, you know, increases by four to 5% every year. And, they they are stable source of revenue for the state governments. In even, you know, in this whole energy transition, the thing about when people talk about energy transition, there is a certain concern on how will government finances pan out if, fossil fuel is completely moved out. So that’s that’s another, area of concern which, some many flag when we talk about energy transition.

Sandeep Pai: Yeah. I was gonna ask about that. So, did you have a sense of what the conversations have been, and is there any planning, long term planning in this regard on, like, how do we manage such large revenues, over a period of time? Because if India were to truly achieve a net zero by 1970, It’s it’s not it’s only forty forty ish years. So, yeah, how how are the conversations going on that?

Jyoti Mukul: Frankly, speaking Sandeep, I have not come across very, very, you know, serious planning on that account that if India transitions to being net zero by 2070, then how what happens to the fossil fuel taxation? We and the loss of revenue to the governments because I’ll tell you why. One, probably they are not, talking about it or governments are not talking. And I mean, both the central and the state governments, they are not talking about it much because they know and, in a realistically sense, we all know that the complete key, you know, phasing out of fossil fuels, may not be possible in a country like India, which has a huge population and is growing right now and will continue to grow. In in countries which are smaller in size, probably, it is easier. We are, you know, the fourth largest consumer of energy. So and you would have noticed that few years back, even in the power sector, there was a talk of phasing out of, coal based capacities, but then then, you know, the there was a sudden ramp pickup of, coal, capacities as well. So what also, what we understand it is net zero, which is being talked of and not really a phase out of the, the, carbon intensive fuels. So in that probably, that’s the reason that I have not come across much discussion on how this, this hole in the budget will be tackled if at all, it if it all, the country moves completely away from fossil fuels. One is that. And second, the other argument which many people give is that if assuming that we move out of the fossil fuel, you know, fossil fuel usage completely by 2070 or later or even earlier, then there may be other sources of taxation which may come up, which, because, you know, as businesses move towards, friendly, environment friendly practices, Those practices also will have, some amount of taxation or will generate some economic activity, which will which will indirectly, contribute to government, revenues. At this point of time, there are incentives and there are viability gap funding for, RE for renewable energy and other maybe sustainable practices. But if they become mainstream, I, do not foresee that, then that those incentives will continue. Because once something picks up, logically speaking, the incentives are also phased out. Right? So, therefore, the the budget, you know, it will be like any other business probably. Sustainable practice will be like any other business, and sustainable technologies and, generation of renewable power will, like, be any other business. So that will also generate probably revenue for the government.

Shreya Jai: Right. Thank you for addressing that. If I can now, you know, shift the gear of the conversation towards the downstream sectors, especially the oil and gas retail market, which in last decades the last two decades, has seen kind of a transformation. And if you can explain that, you know, what kind of transformation the downstream sector has seen. And if you can also address what role did social sector schemes like, you know, Ujwalah, Yojana, etcetera, have played in that.

Jyoti Mukul: Yeah. Sure. Ujwalah, personally speaking, if you ask me, is, is a very good was or is a very good program because simply because it is providing access to, a clean clean in the sense, I’m not talking about LPG, production, but I’m just talking about the whole exercise of cooking, right, in in the kitchen and then you cook. It is a clean fuel in that sense for the person who’s cooking. So in in that sense, it’s much healthier, for that person to cook, through LPG than any other coal or wood or, any such fuel. So in that sense, it is good. And in a in a time when we are looking at being a and we are, aiming, you know, big goal growth goals we have, everybody should have access to energy sources and, I also believe that they should, be able to make their fuel choice as well. Right? So Ujula in that sense has really helped. Of course, price of LPG sometimes, becomes or most times becomes unaffordable for certain families. And therefore, government should give, I firmly believe though there is a lot of, you know, climate activists who say why subsidize LPG, it’s not good for environment because it’s, done out of hydrocarbons. But I personally feel that, families that cannot, you know, afford, to buy cooking fuel, it is our responsibility as a country, even if I have to pay additional tax to from my pocket to the government for, you know, few funding the, cooking fuel of certain families. I think it is fairly okay by me. I would warn that, people should have an access to energy. And in in that sense, I I may sound very, you know, politically incorrect or whatever. I think some amount of energy subsidy, whether it is power or cooking fuel, is required for, certain section of the society. The only thing which we need to probably, fix is the transparency in this, in this whole exercise. How much is the subsidy? Whether, the companies are being reimbursed by the government, that subsidy or not, which sometimes does not happen. The backlog of subsidies from the government to government owned companies, is, huge. It it it runs into. So so that, that needs to be fixed. Now coming to the other part of the downstream or the retailing of oil, petrol and diesel, or I would say the one, scene which has one thing I have seen is, the number of players who are retailing, oil, petrol and diesel change. The there are private players also. They still are nowhere nowhere near where, public sector companies are doing business in terms of selling petroleum diesel. Even LPG, it’s, PSU dominated. But private players have, entered. You can see when private, petrol pumps, once you move out of, bigger cities. So that is also a change one has seen. Of course, there are times when when these, because of the distress they feel in their business, sometimes they have seen, few years back or maybe a decade back, the private sector shut down all their petrol pumps because, it wasn’t viable for them to do. There was subsidy the PSUs were being subsidized in private sector, could not compete. So that that has also happened in the petroleum sector. But largely, I would say that in terms of energy access, whether it’s petrol, diesel, LPG, we, we have done fairly well. We’ve never faced shortages as such.

Sandeep Pai:  Right. I wanna move to another interesting topic, you know, that at least from a global point of view, it’s of deep interest, which is, you know, India’s LNG imports.As you know, like, I’ve, again, like, come across that India’s mass has massive plans to import more LNG, and also because there is very sluggish domestic production. It is that a good strategy to be more dependent on foreign imports of LNG? Shouldn’t India just focus on coal or rather clean coal if there is such a thing called clean coal, rather than depend on another set of import fuels. Personally, if you see, and my, my perspective on this issue of being import dependent, I think, it’s, you know, we live in a world right now. Of course, there are a lot of trade issues and which is something world has probably never seen earlier. But, otherwise, largely, if you see the world over, people are dependent on imports for something or the other. Right? Now, of course, coal is there with us, and coal gives a kind of assurance to us that, okay, we have coal and we will not get, you know, we can generate our power. We can run our cement and steel plants and all that. Coal will be available. But, there are coal shortages also. Right? We had to restart import of coal few, last last year, if I remember correctly.

So it’s not that, and if I look from an energy perspective, and as I mentioned earlier also, I would love to have a basket of fuel available, easily, whether it is through imports or through, you know, domestic sources. So dependence on one particular fuel, is not, is not the right thing to be there. So if we are talking natural gas versus coal based power generation, we are largely coal based. We generate a lot of RE also now. So in that sense, we are not dependent on just coal. But to have, gas based power plants, and there are, power plants in India which had to, you know, basically dismantle their machinery because they didn’t have natural gas with them. So it was more a question of price than availability, I would say, Sandeep, because LNG could not compete with the coal based power generation. So if you from a purely business point of view, it doesn’t make it didn’t make sense for them to generate power through gas, LNG imports. At the same time, there are certain captive LNG plants, which are okay, which are viable for the users to use, you know, take power from them and produce whatever they are producing. So my my answer short answer to your question would be that, of course, we are dependent on import for natural gas and, as we are for crude oil. So it is, that import dependence will be there. But, we should keep all our options open, I would say.

Shreya Jai: Right. One of the major demand drivers for LNG and these estimates that keep coming about our growth in energies, could mostly be driven by, what the country is betting on in terms of CNG and PNG. You know, CGD sector has been a game changer for clean fuel availability in the country, but the sector’s growth in itself has been sporadic. It’s been restricted to metro towns. There are P and G network in the country remains very, very urban. So, you know, what are the challenges that, you know, this, CNG, P and G sector faces in the country? And despite so much push, why the growth has not been so explosive?

Jyoti Mukul: So Shreya, CGD is, is a business, which, of course, in cities like Delhi and, Mumbai and parts of Gujarat have been now are very accustomed to, using the CGT network. And for that for them, it’s not a really new thing. But overall, if you see, CDG is, they are a fairly new there’s it’s a fairly new sector for, for, you know, in terms of fuel accessibility. So, but, it is convenience. It is more modern, and, certainly, it, should be there. Now, any business, not just CTD, but any business, will work, depending on the demand. So if I look at what you said, urban and rural, phenomena, the the reason why certain, they call geographical areas when we give CGD rights out to companies. You know, the petroleum and natural gas regulatory board gives, GAs out to your graphical areas out. Some certain geographical areas, they gave out and, the the the the whole industry and the government was very gung ho about it. But what happened was that, the the demand wasn’t there much. So like any other business, it’s more demand driven. So investment in CGT infrastructure, was, in fact, in natural gas, it is said it’s a chicken and egg case. If you do not have a infrastructure in place, a pipeline in place, or a CGT network in place, then demand may also not come up. At the same time, to justify to make that infrastructure viable, you need a certain base load or base demand, which in certain areas, especially when it comes to, pipe natural gas for domestic areas, the population density outside of big cities is less. So therefore, these, GA is find themselves, in bit of a spot because, the the number of connections is, not as high to justify investment in the CGP network. But I think by and by certain, a certain amount of, certain amount of market, play will come into action. And, also, there’s a whole demand to look at some kind of a subsidy or a viability can funding or or for the CGD network or in in fact, there’s also a demand that the subsidy available for LPG as a cooking fuel should also be available for pipe natural gas because pipe natural gas replaces NPG. So that subsidy should be available to them. So that those are the dynamics which are working out in the sector.

Sandeep Pai: Fantastic. Now let’s move to the new clean fuels. So I wanna start by asking, what do you think would be the impact of  EV deployment in India on natural gas applications like CNG or oil products like petrol? Like, is there a long term trajectory or pathway that has been explored?

Jyoti Mukul: So you are right, Sandeep, that they are competing fuels. CNG, when it came, it was, it kind of wiped, you know, sort of wiped out a certain amount of market share of diesel in cities like Delhi because public transport by a supreme court order had to be on CNG. So, a certain amount of demand came down, but, like, later on picked up. So it was competing with diesel. And then CNG also, you know, CNG penetration and and to answer shares that add on to the question she asked earlier. See coming up of CGN networks, also brought down, of the consumption of diesel and people switching to CNG. There’s a price advantage, for CNG, compared to petrol. And then there was you would remember there was auto auto LPG also, which was at one point of time very extensively promoted, but that it really didn’t catch up much. So auto LPG was also competing with CNG. And then, we now have. Now my assessment, there’s no trajectory as far as the government, you know, modeling is concerned or and even automobile companies, I don’t think, have any clear idea of which will pick up more CNG or EV. But EV has a certain convenience, you know, despite me saying that EV charging stations are not very widely available. We you would realize that even CNG stations are also not available. And unlike CNG, EVs, can be charged at home. In fact, models EV models come with the the charging, chargers, which you can fit at home and, charge a vehicle and new some new building codes require, buildings to have, charging points for EVs. So, certainly, that advantage of convenience is there in EV. And, but I don’t see CNG going away so easily because, there are lots of doubts, you know, still in consumer mind, for EVs, which I think in in case of CNG, it has been taken care of. Especially in NCR region, the whole public transport is on CNG. Their buses are coming up in electric as well. But the demand itself, overall, if you see all our Ubers and all, they are also running, and, they are, inducting electric vehicles as well. But I have not seen the the lines at Singe’s station coming down. You know? There are still long queues outside Singe’s stations.

Shreya Jai:  That’s quite interesting. On the, this whole broad idea of new fuels, I want to discuss something that is making headlines for so long yet, a concrete, I’m not sure, concrete action or, something to hold on is still visible to us, and that is these new age fuels like green hydrogen and, methanol. There are pilot projects happening. There are big commitments being made by the companies, the government, etcetera. At what stage do you think they are? Let’s start with green hydrogen. What kind of promises does it hold?

Jyoti Mukul: So Shreya, green hydrogen is still a long way away when it comes to green hydrogen based mobility. There are models which, you know, Toyota launched for green hydrogen, and then there are, of other models as well globally, which are, you know, looking at green hydrogen. There are two technologies in green hydrogen run vehicles. One, of course, is the, electric, you know, green hydrogen based electric vehicles, is there. So, but, you know, I, don’t think it will be able to, able to, supersede, the demand for, CNG vehicles or, EVs. The non green non hydrogen EVs. That is, I think, a long way right now.

Shreya Jai:  What about ethanol? The government also has a very ambition ambitious ethanol blending program. And if the reports are to be believed, we have met our targets, and now we are much more ambitious in that. And second, now these other fuels are being talked about, you know, fuels from, you know, biomass, methane, methanol. What do you think of that?

Jyoti Mukul: So ethanol, of course, 20% blending is what we have achieved in petrol. Ethanol is blended in petrol. So, there are ambitions to scale it up further. And at a number of retail outlets, the petrol pumps, already e 20 fuel is, being, you know, dispensed. So, sometimes the consumers don’t even come to know that the petrol which is being filled up in their vehicle is ethanol blended e 20. It, so that is already happening. There is, the, whole, ambition to move to higher than ethanol. At some point, it requires the change in vehicle engines. E 20 does, of course, does not require. So a normal vehicle can also run on e 20 petrol. But at a certain stage, if you go one to 200% blending blended fuel or then there, I think, there are requirements. There are actually views on it, different different views on it, whether the engines of the automobiles are required or not. Because countries like Brazil are already doing a lot of blending and 100% also they run on blended fuel. So that is an idea there. But, you know, one interesting thing, which I should point it out is that ethanol blending happens at a certain price level. If, oil prices come down or not oil prices, if you say petrol prices, crude oil not crude oil, but petrol prices, the production cost of production, petrol is less than what, sometimes, is less than what at the price at which, ethanol is available to the oil marketing companies. So that then it becomes a play of, play of, competition between ethanol and the the normal petrol. So only at a certain price point, it becomes, it makes sense for a for a, oil marketing company to go for blending. Of course, the government mandates come with a must do, so they have to do it. But, it also you know, price is also one factor which will come into play here.

Sandeep Pai:  Wonderful. This has been a really great conversation. I just wanna end with one last question, which is, are you working on another book? I’ve read your first book, and I wonder if you’re gonna explain about all these, evolving energy policies, energy landscape in your second book. So just curious if anything is in the on the works.

Jyoti Mukul: Yes, Cindy. I wish I was working on a second book. I’m not, but I do have certain ideas in mind. Maybe at some point, I will turn it into a book proposal. You’re right. Just on energy, I have not written my only book right now is, is one on lockdown and, that too. Many books have come on, COVID, per se, but I tried to look at lockdown from a very, you know, infrastructure reporter, if I may say, point of view, because I felt, that, it may sound very simple, but shutting down of transport services, is a big crisis. You know, we all have seen and gone through that crisis. So I wanted to capture that in my book and also the the whole, you know, we don’t want to remember the COVID times because, many families, witnessed tragedy and the staff time for all of us. Companies, cut salaries and, you know, people were inside their houses and a lot of stress levels high. Nobody wants to remember, but I wanted to, record all that was happening. Mostly in India, the government measures. So idea was to capture the government measures, the impact of, shutting down for this vital segment of infrastructure for transport, various modes of transport. And, that’s what I did. It was a very simple book and, not very, complicated in terms of writing it. At times, it became, then monotonous because, you know, capturing government decisions and they were they are routine decision. Not routine in the sense because COVID wasn’t routine and neither was lockdown, but very, you know, banal kind of decisions and their impact. So one I I just wrote it. It was very simple to write. A book on energy, of course, would be very interesting, and I do have some ideas in mind. But I ideas don’t write a book. You know? Time does. You have to have some time on your hand to write also. Right? So, maybe, I would. I also sometimes feel like writing a fiction, which has been in my mind for some time. So, so let me see what I’m able to, you know, turn out.

Sandeep Pai:  Maybe a energy transition fiction that could be that could combine both. But thank you so much. This has been such a rewarding conversation for me. Thank you.

Jyoti Mukul: Thanks, Sandeep.

Shreya Jai:  Thank you so much, ma’am. It was it was a great conversation, and, I hope whatever the next book is comes out soon. The first one, the great shutdown was, absolutely great. Cover something that, most of us, you know, didn’t focus on. And thank you again for joining us here at the India Energy Hour. It was a fantastic conversation, and thank you again.

Jyoti Mukul: Yeah. It was lovely chatting. Thank you.

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