Finshots Daily Why India’s new Petroleum and Natural Gas Rules matter
Dec 17, 2025
The discussion highlights India's new Petroleum and Natural Gas Rules and their significant impact on the economy. A look back at the 2018 oil discovery near Ashoknagar reveals the costly delays caused by regulatory issues. The host clarifies how antiquated rules hindered investment and production, stressing the importance of updates like 180-day approvals and clearer lease terms. There's hope for Ashoknagar’s production to resume soon, signaling potential gains for local jobs and revenue.
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Old Rules Create Costly Ambiguity
- Ambiguity in the 1959 PNG rules about lease valuation blocked approvals and delayed production for years.
- That delay cost ONGC large exploration spending and denied the state upfront revenue and future royalties.
Regulation Choked Domestic Production
- The outdated regulatory regime contributed to falling domestic crude output and rising import dependence.
- Cumbersome approvals and pricing rules discouraged investment even as capital expenditure rose.
Policy Made Investment Risky
- Administered pricing and asymmetric compensation left private and foreign firms bearing downside risks.
- Temporary, revocable lease terms further undermined long-term investment incentives.