Financial Daily from THE HINDU group of publications
Tuesday, Mar 15, 2005
Financial Daily from THE HINDU group of publications Tuesday, Mar 15, 2005 |
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Petroleum Government - Policy Industry & Economy - PSU Oil PSUs may get limited autonomy to fix prices Our Bureau
New Delhi , March 14 THE Minister for Petroleum and Natural Gas, Mr Mani Shankar Aiyar, on Monday said the Government would like to give public sector oil firms limited autonomy to fix petrol and diesel prices within a narrow price band, once international prices stabilise. International oil prices, he said, were expected to stabilise by April-May once the US administration puts in place policies to curb runaway fiscal and budgetary deficit. He hoped that the prices would be relatively lower to those prevailing last year. On the domestic pricing policy, Mr Aiyar said, "as soon as signs of stabilising international markets are seen, we should be able to put together a domestic pricing policy". Commenting on the 2005-06 Budget changes pertaining to excise duties on petroleum products, Mr Aiyar he would approach the Union Cabinet for a possible increase in petrol and diesel. Interacting with members of the Forum of Financial Writers, he said the Ministry proposal for a possible price hike could go to the Cabinet in a months' time. "We would like to revert to the price band mechanism (fixing auto fuel prices in a narrow 10 per cent band) when the international prices stabilise,'' he said. The Minister pointed out that the change in excise duties had put a heavy burden on the oil companies. Not passing on the incidence of increased excise duty would result in approximately Rs 264 crore of losses to them every fortnight, he added. The Budget 2005-06 cut customs duty on petrol and diesel to 10 per cent from 15 per cent but reworked the excise duty on both products to a mix of ad valorem and specific rates. Additionally, the cess for road development has been increased by Rs 0.50-2.00 per litre.
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