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By Promit Mukherjee and Sudarshan Varadhan
NEW DELHI, Oct 15 (Reuters) - Global oil major BPsaid on Monday fuel price controls were "not good", days afterIndia asked state-run fuel retailers to shield customers fromrecord-high costs by cutting margins.
BP has a tie-up with Reliance Industries, owner ofthe world's biggest refining complex, to enter India'sdownstream sector, including natural gas marketing and retailfuel sales.
"I think that price controls are a kind of thing that willnot be good for the sector in the longer term," Bob Dudley,Group Chief Executive of BP, said at the India Energy Forumorganised by IHS CERA.
He did not comment on when BP would open its first fuelretail outlet in India in partnership with Reliance.
India cut taxes on diesel and gasoline this month and askedstate companies, which account for the bulk of retail fuel salesin the country, to reduce the price of the two sensitiveauto-fuels by one rupees on every litre of fuel sold.
The move was widely seen as government intervention in localfuel pricing, although Finance Minister Arun Jaitley and OilMinister Dharmendra Pradhan had said the step should not be seenas going back to a regulated regime.
The government has since said it would not interfere withmarket-determined prices of gasoline and diesel."I have not heard any suggestions that India will go back toprice controls. There have been some reductions on parts of thetaxes," Dudley told reporters in New Delhi on Monday.
BP, which has tied up with Reliance to explore gas fields inIndia, expects to have a 10 percent gas market share by 2022,Dudley said, adding he expected BP India's gas production withReliance to be 1 billion cubic feet per day in five years.
He said he was hopeful that over that timeframe the companywould have large retailing partnerships with Reliance and astrong presence in India's solar market.
In 2011, BP paid $9 billion to billionaire Mukesh Ambani'sReliance Industries to buy a 30 percent stake in a deepwateroffshore natural gas field in the Bay of Bengal.
However, both companies held off from announcing any majorinvestments in the field as the local natural gas price did notsupport a sufficient return on investment.
The government allowed higher prices from deepwater naturalgas reserves from October 2014.
Dudley said the low natural gas price in India before 2014was a major factor that slowed down its investments in thecountry.
Last year, Reliance and BP announced an investment of $6billion to develop three fields in the east coast of India whichwould add around 30-35 million standard cubic metres per day(mscmd) of gas between 2020 and 2022.
"We plan for the long term and we’re here in India for thelong term," Dudley said on Monday, referring to BP's plans forIndia.(Reporting by Promit Mukherjee and Sudarshan Varadhan; Editingby Dale Hudson and Mark Potter)
