Role of regulatory monitoring in the Indian Oil and Gas Sector for Risk Reduction

Abstract

Abstract OALP was introduced in 2016 by GoI with a less regulatory burden to the government and pricing freedom to investing firms. Earlier policy NELP was with exploration and production cost recovery and price control by GoI. The new policy OALP is with no-cost recovery (exploration and production cost), revenue sharing, and pricing freedom to the firm. The Oil and gas industry is involved with a wide variety of risks. In OALP, there is no regulatory monitoring and no cost recovery; this has increased the risk to the Indian oil and gas industry; a firm may go for cheap alternatives, which can cause accidents and create direct loss to the industry and the country's reputation. In addition, pricing freedom for the firm can increase the natural gas price, and the gas-dependent sectors face trouble in purchasing. This paper studied the role of regulatory monitoring in risk reduction in the Indian oil and gas sector.