Oil Secy rules out immediate decontrol of diesel prices
Oil Secretary G C Chaturvedi Wednesday said though the government wants to decontrol diesel price, it will not do so till inflation comes down and confidence in the sustainability of higher economic growth returns.
Mumbai: Oil Secretary G C Chaturvedi Wednesday said though the government wants to decontrol diesel price, it will not do so till inflation comes down and confidence in the sustainability of higher economic growth returns.
"The assessment is that if diesel (price) is left free, it might lead to further acceleration in inflation. Till there is confidence in a stable growth and a containable inflation, such modulation (of regulating prices) may exist but it is not a long-term perspective," Chaturvedi said addressing the Offshore India conference here.
"I would say this is a transient phenomenon and we ourselves in the government would like to see that the prices of all petro products are fixed as per the international prices," he added.
On LPG price hike, he said, the empowered group of ministers which is meeting Tuesday will discuss LPG price.
The secretary further said the recent spike in international crude prices has resulted in under-recoveries in diesel going up to Rs 6 per litre from the earlier Rs 4.57.
"The government is quite conscious of the under-recovery, quite conscious of the price parity with the international market and has been taking steps to keep them as close to the international prices as possible," he said, elaborating the steps taken by the government in June, which included a cut in duties and taxes accompanied by a price hike of Rs 3 a litre on diesel resulting in a revenue loss of nearly Rs 50,000 crore to the Exchequer.
Inflation for August stood at an uncomfortable 9.78 percent, according to the data released Wednesday while there is widespread scepticism on whether the country will be able to sustain its high growth rates due to a variety of factors, including the high crude prices.
Though the government has completely deregulated petrol rates, it has not done so for the politically sensitive diesel, kerosene and liquefied petroleum gas yet. Chaturvedi said the empowered group of ministers will discuss LPG price hike issue Tuesday.
Asked whether the EGoM will take up diesel decontrol, he said under-recoveries warrant such a move but it is upon the EGoM to take a final call on it. "We present the data to them," he said.
On the recent CAG report which has been critical of the ministry's handling of the Krishna Godavari basin fields with Reliance Industries, he said, the ministry will present its case before the PAC (public accounts committee) whenever it is summoned.
To a query on another CAG recommendation on the dual role of the Directorate General of Hydrocarbons, Chaturvedi said none of the reports like the CAG's or the earlier one by the Naresh Narad committee (set up in 2001) gave any solutions to the problem and maintained that the government cannot do away with the DGH.
"We cannot take away the DGH. The DGH is the technical arm of the government. What would the DGH do and what would the regulator do these things are not clear," he admitted.
Asked for his reaction on the criticism that the CAG has not put a number to the possible losses, he said, "I can't comment. It is up to the CAG to calculate or not calculate. I can't say anything. May be there would have been some constraints because of which they could not calculate the exact amount. It can be done later on also".