The Hindu Business Line : PM sets up panel to examine financial position of oil cos

New Delhi, June 4 The Prime Minister has constituted a high-powered committee under the chairmanship of Mr B.K. Chaturvedi, Member, Planning Commission to examine the financial position of Oil Companies.

According to an official communiqué, the committee will examine the impact of the increase in oil prices between 2004-05 and 2008 on the financial position of oil companies, including upstream exploration companies, refiners and downstream oil marketing companies (OMCs). It will also examine the available options for burden sharing by all stakeholders, including upstream exploration companies, refiners, downstream OMCs and stand alone refiners.

It will also analyse the cash flows and the profitability of all three groups of companies so as to get a clear picture of the changes taking place in their operating positions, particularly the impact on access to credit and cash availability for their operations.

The committee will also revisit the concept of “under recoveries” and examine the reported deficit and the real deficit faced by OMCs as a result of price constraints imposed on them. It will estimate the financial needs of the refiners and OMCs in order to continue their normal business activities and to meet the energy needs of the economy and the possible sources of funds to meet their financial needs.

Panel members

The other members of the committee are Dr Saumitra Chaudhuri, Member, Prime Minister’s Economic Advisory Council and Dr Arvind Virmani, Chief Economic Advisor, Government of India.

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