Govt's role in focus, CCI trains lens on oil price fixing

The government's continued intervention by way of informal political diktats to oil companies on fuel prices, especially that of petrol, a deregulated product, has come under the scanner of the Competition Commission of India (CCI). Mahua Venkatesh and Anupama Airy report.

The government's continued intervention by way of informal political diktats to oil companies on fuel prices, especially that of petrol, a deregulated product, has come under the scanner of the Competition Commission of India (CCI).

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The CCI will also probe how the three oil marketing companies - Indian Oil, Bharat Petroleum and Hindustan Petroleum - are able to price the auto and cooking fuels (petrol, diesel, cooking gas and kerosene) at almost same rates despite the cost of production varying from one company to another.

CCI chairman Ashok Chawla said the commission wants to probe the role of the government in deciding the price of petrol that is de-controlled since June 2010. The CCI will soon seek an explanation from the petroleum ministry on the issue, he said.

The three oil marketing companies are already facing an audit by the Comptroller and Auditor General (CAG) on the pricing and calculation of under-recoveries on auto and cooking fuels.

"We want to know how the oil companies fix their prices and how all companies come to a single price point for petroleum at the same time," said Chawla.

"Neither merely being a PSU nor being a PSU engaged in products falling under the Essential Commodities Act are out the CCI ambit," said Manoj Kumar, legal expert and managing partner, Hammurabi.