To discuss fuel pricing, subsidies; decision likely by month-end

Our Bureau

New Delhi, March 3

The Petroleum Minister, Mr Murli Deora, and Ministry officials are expected to meet the Finance Minister, Mr P. Chidambaram on Monday to discuss the issue of fuel pricing and subsidies.

The meeting will also seek to work out a mechanism which would ensure that the State-owned oil companies do not continue to lose money on selling petroleum products and the common man is not burdened with a price hike.

With the Budget leaving most of the issues untouched, the meeting gains relevance.

On whether he was disappointed with the Budget, Mr Deora said: "No, I am not disappointed by the Budget. It's a dream Budget and I welcome it. For the oil sector some of the problems have been addressed and some have not. We are going to meet the Finance Minister to resolve these."

Speaking to newspersons on the sidelines of a road show organised to attract bids for the third round of coal bed methane (CBM), where 10 blocks are on offer, the Minister said that his efforts would be to ensure that public sector oil companies do not lose money on selling petroleum products while ensuring that common man was not burdened with price hike.

A decision on pricing of petrol and diesel and subsidies on kerosene and cooking gas (LPG) is likely to be taken by the month-end.

"We are trying to see that consumers, especially the small and vulnerable sections, are not burdened. We always try to ensure that there are no price increases but sometimes they become unavoidable."

Asked if LPG and PDS kerosene may be spared from any increase and a marginal increase in petrol and diesel prices effected, he said: "I can't say just now. It would depend on the Finance Ministry's response on hiking subsidies on LPG and kerosene and rationalising duties."

The Petroleum Ministry is in talks with the Finance Ministry based on the recommendations of the Dr C. Rangarajan Committee.

Mr Deora said that while some of the suggestions of the panel were welcome, some like raising LPG price by Rs 75 per cylinder were difficult to implement.

He added that the three-month time schedule fixed by the Finance Minster for a thorough discussion on the committee's suggestions and working out a package to rescue the oil sector seemed realistic.

(This article was published in the Business Line print edition dated March 4, 2006)
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