Financial Daily from THE HINDU group of publications
Saturday, Apr 06, 2002
Industry & Economy - Petroleum
Natural gas at market prices to power, fertiliser cos: Naik
MUMBAI, April 5
FERTILISER and power producers using natural gas will now have to pay market prices for the feedstock.
The Cabinet will shortly take a view on revising natural gas prices. Hereafter, there will be no subsidy for use of gas as feedstock, Mr Ram Naik, Union Minister of Petroleum and Natural Gas, told Business Line here on Friday.
Mr Naik said following the oil sector decontrol, fertiliser and power units would not be supplied gas at subsidised rates. The Petroleum Ministry had recently freed prices of crude oil sold by Oil and Natural Gas Corporation Ltd and Oil India Ltd. Now the much-awaited revision of natural gas prices was also in the pipeline, the Minister said.
Mr Naik said Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation would not be compensated for the losses incurred by holding on to the current price levels.
"The marketing companies are making good profits and are strong enough to absorb volatility. It was the companies' decision to help insulate consumers from temporary fluctuations in international crude prices, at least in the initial stages of sector decontrol. So the question of compensating for losses does not arise,'' Mr Naik said.
On the disinvestment of oil PSUs, he said the Government had not yet decided on how much stake it would divest in BPCL and HPCL, which are on the disinvestment block. "The process of appointing advisors has been initiated. We have not yet decided on how much (stake) should be divested,'' Mr Naik said.
He said that although Reliance Industries Ltd and Essar Oil Ltd had both applied for marketing rights, other PSUs "including ONGC and Gas Authority of India Ltd could also enter marketing''.
Mr Naik said separate budgetary provisions had been made for providing freight subsidies for petroleum product supplies to regions such as Jammu and Kashmir, North-Eastern States and Andaman & Nicobar.
Mr Naik denied having heard of any proposal of one or a group of oil PSUs picking up majority stake in the beleaguered Mangalore Refineries and Petrochemicals Ltd. "If the A.V. Birla group brings in a strong partner, HPCL may agree to relinquish its stake,'' he said.
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