The government is working on a new subsidy regime for petroleum products but ruled out dual pricing of diesel for the time being.
“We are working on a (subsidy) mechanism, as it’s very difficult to implement dual pricing of diesel,” Petroleum Minister Murli Deora said, while addressing a parallel session of oil and gas conference Petrotech 2010 at Ficci.
Deora also ruled out de-regulation of kerosene prices as the fuel is used by the poor and it was the government’s responsibility to ensure its availability at an affordable price.
In June the government deregulated prices of petrol allowing oil companies to fix prices in accordance with prices of crude oil.
Deora said that the decontrol in petrol prices has bolstered the finances of oil marketing companies.
Prime Minister Manmohan Singh said India’s oil demand will jump by 40% in the next 10 years, underlining the need on securing energy supplies at affordable prices to meet the requirements of a fast growing economy.
“India needs adequate supplies of energy at affordable prices to meet the demand of its rapidly growing economy,” he said inaugurating the Petrotech-2010
“Demand over the next 10 years will increase by over 40 per cent, whereas the increase in supply from the maturing (domestic) oilfields is expected to be around 12 per cent,” he said.
To bridge the shortfall, the government is encouraging national oil companies to acquire oil and gas fields abroad, Singh said.
Oil and gas today are not seen as mere commodities to be traded freely. “They are often used by countries to meet their political objectives.”
“There are supply-side uncertainties. Many mature fields are declining in production. Some energy endowed countries have problems in augmenting production because of various reasons including lack of the required technology and political uncertainty,” Singh said.