Indications from various sources are mixed about the possible outcome of the much awaited meeting of the empowered group of ministers (EGoM) led by finance minister, Mr Pranab Mukherjee on Monday.
While the three major oil refining companies and the ministry of oil and natural gas are certain that there could be deregulation of petrol prices immediately there is a strong view that the EGoM may not take any immediate decision on implementing the recommendations of the Kirit Parikh Committee.
Monday’s meeting will be a preliminary meeting to discuss the pros and cons of the recommendations in detail, they say. This section believes that this is not an opportune time to deregulate petrol and diesel prices, particularly when inflation is still high.
They will also have the freshly minted heroine Mamata Banerjee to contend with as she is part of the EGoM.
The Kirit Parikh Committee had recommended immediate deregulation in the price of petrol as it would not have a cascading affect on prices of commodities.
Showing posts with label Kirit Parikh committee. Show all posts
Showing posts with label Kirit Parikh committee. Show all posts
Monday, June 7, 2010
Monday, February 1, 2010
Decision on fuel pricing likely this week; revenue loss may affect prices
The government may decide on freeing petrol and diesel prices after an expert committee on fuel pricing submits its report this week, Petroleum Minister Murli Deora said on Monday.
Finance Minister Pranab Mukherjee is believed to be in favour of giving state-run oil firms freedom to fix price of petrol and diesel in step with cost, as he feels the current moderate global oil rates may be the last window India has to deregulate fuel pricing.
“We are trying our best to see that prices are not raised,” Mr. Deora told reporters here.
But a rate hike may become inevitable as government’s limited financial resources are not enough to meet the revenue loss on selling petrol, diesel, LPG and kerosene below cost.
“(The Cabinet had in July 2009) decided that government will meet all of the under-recovery (revenue loss) on domestic LPG and kerosene either through bonds or in cash and the same on petrol and diesel was to be met by upstream companies like ONGC,” he said.
While Oil and Natural Gas Corp, Oil India and GAIL borne the entire Rs 8,364 crore under-recovery on petrol and diesel in first three quarters of current fiscal, the government has agreed to give only Rs 12,000 crore in cash against the Rs 20,989 crore revenue loss on cooking fuel in April-December.
“We will be meeting Finance Minister tomorrow to see how this under-recovery is to be met,” Mr. Deora said adding a decision on fuel pricing was likely only after the Kirit Parikh committee submits its report this week.
Finance Minister Pranab Mukherjee is believed to be in favour of giving state-run oil firms freedom to fix price of petrol and diesel in step with cost, as he feels the current moderate global oil rates may be the last window India has to deregulate fuel pricing.
“We are trying our best to see that prices are not raised,” Mr. Deora told reporters here.
But a rate hike may become inevitable as government’s limited financial resources are not enough to meet the revenue loss on selling petrol, diesel, LPG and kerosene below cost.
“(The Cabinet had in July 2009) decided that government will meet all of the under-recovery (revenue loss) on domestic LPG and kerosene either through bonds or in cash and the same on petrol and diesel was to be met by upstream companies like ONGC,” he said.
While Oil and Natural Gas Corp, Oil India and GAIL borne the entire Rs 8,364 crore under-recovery on petrol and diesel in first three quarters of current fiscal, the government has agreed to give only Rs 12,000 crore in cash against the Rs 20,989 crore revenue loss on cooking fuel in April-December.
“We will be meeting Finance Minister tomorrow to see how this under-recovery is to be met,” Mr. Deora said adding a decision on fuel pricing was likely only after the Kirit Parikh committee submits its report this week.
