Financial Daily from THE HINDU group of publications
Thursday, Sep 22, 2005
Financial Daily from THE HINDU group of publications Thursday, Sep 22, 2005 |
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Industry & Economy
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Petroleum Limit sale of subsidised LPG to poor: IOC Our Bureau
Kolkata , Sept. 21 TO reduce losses on the sale of domestic LPG and kerosene, Indian Oil Corporation (IOC) has proposed to the Centre the limiting of the sale of such subsidised products to below poverty line (BPL) customers only. According to the existing policy, though subsidised kerosene is meant for only BPL families, domestic LPG is offered at a subsidised rate irrespective of the economic background of the customer. IOC has registered under-recoveries of Rs 6,589 crore against the sale of subsidised kerosene and LPG in 2004-05. Of this amount, Rs 2,788 crore was on account of subsidised LPG alone. The company controls close to 50 per cent of the domestic LPG market. The IOC Chairman, Mr Sarthak Behuria, mooted an all-round strategy on LPG, a kerosene-subsidy-sharing arrangement within the oil and natural gas sector and the reduction in duties and taxes on petroleum products by the Government to deal with the under-recoveries of oil marketing companies. He was addressing the Global leadership Conference organised by Strategic Management Technology Consultants at the Indian Institute of Management, Kolkata. Mr Behuria focussed on the development of integrated oil companies with sufficient upstream and downstream exposure along the lines of global oil majors. "Two to three years back, the refining sector was badly hit. Today, refineries are making money and so are upstream companies, but marketing companies are losing heavily. Backward and forward integration will prevent such drastic changes in fortunes due to sharp deviations in oil prices. "The proposed mega-merger of oil PSUs was definitely a good idea. However, its implementation could be tough," he warned.
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