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Changing Advancements In India's Energy Regulations: Role of Public and Private Sectors

Updated: Sep 25

Anshit Minocha, Nyayshastram


Energy is that chunk or component of a country that suffers marvellous profits as well as losses because of the diversification created amongst the sector. The fundamental legislation which administers and merely defines the conduct in the power sector is The Electricity Act, 2003. The Oil and Petroleum-based industry play a pivotal role in determining the Gross Domestic Product, as well as other circumstantial aspects which whirl around the economy. It is proven that majorly a nation’s economic growth is proportionate with the extend of profits incurring within the energy sector of the specific country.

India has been one of the largest importers and exporters of Petroleum and Oil-based products amongst other countries such as the USA, South Korea, Japan, and China. Furthermore, the similar market of India is expected to expand at an expeditious rate after the restrictions of COVID-19 are lifted off.[1] America and Northern Eastern States contribute the most to the production of oil as well as their export throughout the world. Russia accounts for the third position around the whole world, generating more than 10 % of the total oil present in the whole world.[2]

Statistical Increments and COVID-19 Outbreak

The United States of America is one of the bulkiest producers of Oil and Petroleum-based products amongst the whole world. It accounts for concentrating 9/10th of the world’s most significant oil reserves and accounts for the fifth position in the accumulation of natural gas stocks. Studies show and prove that America is one of the globe’s bulkiest oil and petroleum-based product utilization country, which involves its export and import also. [3] America, in its distinctive form, is anticipated to cross the shores of the amount of production done, involving its utilization, by Russia and most of the Northern Eastern States. Along with the United States, significant consumers revolve around Brazil, Iraq, Norway, Dubai.[4]

Role of Public Sector in Oil and Petroleum-Based Products

In India, only the Union Government and the respective State Government have the arbitration authority of meddling and ensure employment of all the specified functions of any such authority. This jurisdiction is also communal to Territorial Government governing at least 50% shares. Contemporarily, the jurisdiction of the public sector extends to Railways (which is characterized by Monopoly), Atomic Energy, and Explosive Material. Before the 1950s, there were countable public sector companies segregated in the country which included the Indian Railways, Telegraphs and Posts, Port Trusts, All India Radio.

However, as time has emerged after the period of independence, several guidelines for the betterment of the socio-economic dignity and position of the companies have been laid down. 5 Year plan governs the financial and social betterment of similar classified industries. A new economic policy was launched by Mr Manmohan Singh and P.V. Narsimha Rao in late 1990.[5]

The fundamental aspects of the specified economic policy are as follows:

· To ensure sustainable advancement and betterment, i.e. saving up for future generations.

· To achieve effective and efficient use of natural as well as human resources.

· To open India to the rest of the globe.

· To increase the significant play of India as a global competitor.[6]

The following are the aspects which are overlooked by the Public Sector:

· To achieve financial equilibrium.

· To provide apt employment opportunities.

· To encourage the business and trade of small-scale businesses.

· To ensure the growth of the energy sector.[7]

Role of Private Sector in Oil and Petroleum-Based Products

The Indian Oil & Gas Industry, having broad and comprehensive classifications is resolved to receiving investments and aids from the public sector as well as the private sector which are also whirled around some of the other key country’s foreign players. In late 1997, a policy termed “New Exploration Licensing Policy” was introduced which popularized the energy sector as well whirling around the foreign sectors accounting for private sectors. Reliance Industries is one of the highest influential and operating industry in this particular region[8].

After the introduction of NELP, the nation’s oil and gas scenario has been amended and ameliorated notoriously. NELP has outlined a roadmap to ensure and invite private investors to whirl around the world. Some of the major companies acting within the ambit of private sector industries are Reliance, Essar Oil Limited, Adani Gas, Petronet LNG, Clairn, Shell, and BG Group.

Until the late 2000s, the fuel retailing sector was not influenced by the jurisdiction of the private sector. However, the Government of India took a major step to open the specific market for the private sector with certain and optimistic obligations. The Fuel Retailing sector is greatly influenced by private players like RIL, Essar and Shell.[9]

Statutes Governing the Energy Sector

There had been various legislations governing specifically the power sector in our nation. The nation’s first act to address the power sector was The Indian Electricity Act 1910 which provided for the advancing of licenses to any sector or an individual to perform the act of producing energy within the sector. Another legislation which administers the total amount of electricity produced within a sector and taking corrective measures to ensure electricity is spread evenly throughout the diverse neighbourhoods, is The Electricity (Supply) Act, 1948. This is a central legislation, and State Electricity boards have been construed under this act to ensure better advancement of electricity throughout different states.[10]

The Electricity Regulatory Commissions Act, 1998 governs the administration of numerous tariffs, fiscal as well as monetary policies, allowances, endowments, and related matters.

Recent Advancements in the Energy Sector

The Electricity Act, 2003

This statute was enforced by the Central Government concerning the ongoing advancements in the energy sector and to ensure that a legal immunity is provided to the same. This law is a generic and homogenous one that ensures the preservation of the rights of individuals involved in the power sector. This law facilitates export, trading, distributing, and other methods of growing the radial of electricity.[11]

The Electricity (Amendment) Bill, 2014

This bill was imported and popularized in the House of People in the year 2014, by the Power Minister having the peculiar aim of bringing reform in the existing Electricity Act, 2003. This bill circulated numerous amendments to the Electricity Act 2003[12]. Amendments are necessary to ensure a statute is not lifeless and continues with the essence of time. This bill introduced opening up of new markets and facilitating greater and relatively effective and efficient inputs for renewable energy, this bill also suggested numerous ways to ensure the current power and energy scenario is advanced.


As generations grow, old, contemporary and modern legislations have been advancing in the power sector as well as the Energy Sector, ensuring that it is liberalized as well as profitable. However, a problem which still concerns the energy sector is the accelerated growth in the amount of demand and the supply not grappling with the same.[13] Nevertheless, the Government of India is taking several steps to ensure an impressive quick fix is provided to this dilemma.[14]

As time progress, the public and private sector should also endeavour towards the betterment of the society as well as promoting awareness amongst individuals to ensure the accomplishment of “Sustainable Development”. ‘

The disruption of the Novel Corona Virus has proved to be a havoc for the whole world. However, an antidote for the virus is still yet to be discovered by the dedicated and diligent scientists working across the whole globe.[15]

[1] C. Kennedy, India Becomes 3rd Largest Oil Importer, Oil Price (18/062015), available at https://oilprice.com/Energy/Crude-Oil/India-Becomes-3rd-Largest-Oil-Importer.html, last seen on 18/08/2020. [2] N. Sonnichsen, Global Oil Industry and Market- Statistics & Facts, Statista (22/06/2020), available at https://www.statista.com/topics/1783/global-oil-industry-and-market/, last seen on 18/08/2020. [3] N Sonnichsen, Oil in the U.S- Statistics & Facts, Statista (18/08/2020), available at https://www.statista.com/topics/1706/oil-and-gas/#:~:text=The%20United%20States%20has%20been,fifth%2Dlargest%20natural%20gas%20reserves., last seen on 18/08/2020. [4] S. Stebbins, These 15 countries, as home to largest reserves, control the world’s oil, USA Today (22/05/2019), available at https://www.usatoday.com/story/money/2019/05/22/largest-oil-reserves-in-world-15-countries-that-control-the-worlds-oil/39497945/, last seen on 18/08/2020. [5]H. Singh, New Economic Policy of 1991: Objectives, Features and Impacts, Jagran Josh (14/10/2019), available at https://www.jagranjosh.com/general-knowledge/new-economic-policy-of-1991-objectives-features-and-impacts-1448348633-1#:~:text=New%20Economic%20Policy%20of%20India,Narasimha%20Rao.&text=In%20this%20New%20Economic%20Policy,currency%20to%20increase%20the%20export., last seen on 18/08/2020. [6] H. Singh, Public Sectors In Indian Economy: Objectives, Importance, Performance and Problems, Jagran Josh (9/11/2019), available at https://www.jagranjosh.com/general-knowledge/public-sectors-in-indian-economy-objectives-importance-performance-and-problems-1448432925-1, last seen on 18/08/2020. [7] Ibid. [8] D. Chakraborty, Reliance Overtakes Exxon to Become World’s No. 2 Energy Firm, Bloomberg (25/07/2020), available at https://www.bloombergquint.com/markets/reliance-overtakes-exxon-to-become-world-s-no-2-energy-company, last seen on 18/08/2020. [9] R. Chandramouli, Shell, Essar fire up fuel retailing space, The Times of India (12/02/2020), available at https://timesofindia.indiatimes.com/business/india-business/shell-essar-fire-up-fuel-retailing-space/articleshow/74089516.cms, last seen on 19/08/2020. [10] A. Joshi & S. Talwar, Legal Issues in India’s Energy Sector, 6 (1st ed, 2019). [11] Ibid. [12] Supra 10. [13] R. Rapier, Short Term Energy Outlook Shows Impact of COVID-19 On Energy Sector, Forbes (20/04/2020), available at https://www.forbes.com/sites/rrapier/2020/05/17/short-term-energy-outlook-shows-impact-of-covid-19-on-energy-sector/, last seen on 19/08/2020. [14] V. Raja, 5 Important Steps India is Taking to Tackle COVID-19, The Better India (14/03/2020), available at https://www.thebetterindia.com/219995/coronavirus-in-india-steps-covid-19-infection-kerala-delhi-bangalore-health-government/, last seen on 19/08/2020. [15]J. Gallagher, Coronavirus vaccine: When will we have one? , BBC News (21/07/2020), available at https://www.bbc.com/news/health-51665497, last seen on 19/08/2020.


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