Budget to reflect petro product pricing: Deora | india | Hindustan Times
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Budget to reflect petro product pricing: Deora

A report of a committee on the pricing of petroleum products, expected next week, will be reflected in policy directions in the budget.

india Updated: Feb 11, 2006 20:51 IST

A report of a committee on the pricing of petroleum products, expected next week, will be reflected in policy directions in the union budget to be presented later this month, Petroleum Minister Murli Deora said on Wednesday.

After meeting C Rangarajan, head of the committee, Deora said: "He has promised to submit his report Tuesday, ahead of the budget so that it can form part of the policy directions to be spelt out for the next fiscal."

During a meeting earlier this week, Finance Minister P Chidambaram had given a sympathetic hearing to problems of the state-owned oil marketing companies which are facing heavy losses and under-recoveries due to the burden of subsidies and freeze on retail prices of petrol, diesel, kerosene and cooking gas over last several months despite high global prices, he said.

"The finance minister agreed that the public sector units cannot be allowed to bleed further," Deora told reporters.

The pricing committee report is expected to give a clear definition of trade parity pricing as also seek to protect the interest of consumers, the government and the state-owned oil companies, Rangarajan said.

"Some of the issues still need to be sorted out but the broad approach has been to consider interests of all stakeholders," said the former Reserve Bank of India governor.

"To ensure uniform pricing of products across the country, it would clearly define and give directions on freight equalisation, import and trade parity pricing among others," he said.

While looking at the issue of subsidies for kerosene and cooking gas, which cannot be done away with, the expert said the suggestions of energy expert and planning commission member Kirit S Parikh on issuing coupons to below poverty line families would be considered to ensure that the poor people genuinely benefit.

About 60 per cent of the subsidised kerosene is currently being availed of by below poverty line families while the rest is sold to above poverty line families. To ensure that the subsidy for the genuinely needy families reaches them, Rangarajan said he was considering the suggestion of having either a coupon system or a debit card system.

For implementation of the scheme, he said the report would indicate areas that need to be addressed by the state governments.