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BW Businessworld

OilMin To Face PM Scrutiny

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Prime Minister Manmohan Singh will review the functioning of the oil ministry amid criticism over falling output from a key gas field as well as poor performance of state-run oil firms, the Economic Times reported on Friday quoting unnamed government officials.

In June, the oil ministry came under criticism from the state auditor for what it said was allowing some exploring companies to overstate costs of field developments and exploring beyond their contracted areas.

The Comptroller and Auditor General's (CAG) draft report said energy major Reliance Industries had inflated development costs on its D6 block in the Krishna-Godavari basin and cited a joint venture of Reliance with BG and ONGC for hiking development costs in the Panna-Mukta and Tapti gas fields.

Reliance is already facing criticism for pumping less gas than it should from the key D6 block, one of the biggest gas producing blocks in India.

"PM will take a review meeting soon but no definite date is known to us," the Economic Times quoted an unnamed oil ministry official as saying.

It said Prime Minister Manmohan Singh will also assess the performance of state-run oil companies, some of which have posted losses in the first quarter of the current year.

He is also expected to review the burgeoning fuel subsidy bill and delays in key appointments to state oil firms, the report said.

The possible review by the prime minister comes at a time when his coalition's political capital is being sapped by popular protests against government corruption.

(Reuters)