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Mumbai , Oct. 11

DIFFERENTIAL pricing of petroleum products will have an adverse effect on industrial growth, Mr Ram Naik, Union Minister of Petroleum and Natural Gas, said here on Friday.

Companies are reportedly seeking differential pricing to beat private sector competition from undercutting prices. Costs at coastal refineries are lower and product availability through imports cheaper.

The Minister indicated his disapproval for the differential pricing system: "Prices of basic fuels should not vary in different parts of the country as it takes away the level playing field which should be ensured for industries in the country," he said.

"Although there have been reports that oil companies would like differential prices, Ministry has not received a formal proposal," Mr Naik told reporters at a function marking the fourth year of his tenure as Petroleum Minister.

Mr Naik said the Government was out of the picture when it came to Government-owned oil companies selling their cross holdings. "It is a commercial decision to be taken by oil companies if they want to sell their stake in another oil company," the Minister said.

Mr Naik said that although there had been an informal mention by IOC officials suggesting partial dilution of Union Government's 82 per cent stake in the company for raising Rs 10,000-12,000 crore as an alternative to selling off the company's retail business, no formal proposal has been made, he said.

The Minister said Union Government is "simultaneously working on three options" for solving the imbroglio of HPCL and BPCL disinvestment.

The Supreme Court had stayed the disinvestment of both companies saying the Government could not sell its stake as HPCL and BPCL were created through Parliament ordinance.

"The first option is to approach the Parliament. Ministers, Ms Sushma Swaraj, Mr Arun Jaitley and Mr Arun Shourie are working on creating a consensus in Parliament, as we do not enjoy a majority.

The second is seeking a clarification from the Supreme Court and third is the option to divest the only remaining Government-owned oil marketing company," Mr Naik said.

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