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New Delhi, Oct 26

THE Chairman of the Prime Ministers Economic Advisory Council, Dr C. Rangarajan, is to head a five-member inter-ministerial committee that will formulate a long-term policy on pricing and taxation of petroleum products.

Addressing a press conference here on Wednesday, the Secretary, Ministry of Petroleum and Natural Gas, Mr S.C. Tripathi, said that the committee will submit its report within six months. It has been asked to suggest a comprehensive mechanism for pricing of sensitive petroleum products after taking into consideration the interest of all the stakeholders, including the Government, oil companies and the public.

"The committee should help respond to changing global oil scenario so that the interest of all the stakeholders is taken care off. At present it is not a very happy situation where there are frequent changes in the prices and we are unable to respond quickly leading to difficulties for all stakeholders," the Secretary said.

The proposed mechanism could cut down on the need to seek clearance from the Government every time there is drastic movement in the price of petroleum products. "If the situation changes drastically and the mechanism does not work, we will have to approach the Government, otherwise there may not be the need to go back to the Government," Mr Tripathi said.

When asked whether the committee will also look into pricing of petro-products and duty cuts, the Secretary said "Nothing has been ruled out. Theoretically, this can happen but we live in a practical world."

Commenting on the Cabinet decision to issue bonds that should help cover a substantial amount of under recoveries in the sector, the Secretary said that the Petroleum Ministry was in talks with the Finance Ministry for issuing them.

(This article was published in the Business Line print edition dated October 27, 2005)
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