Petroleum Minister Ram Naik said prices of kerosene for public distribution and domestic LPG need to be increased so as to reach a subsidy level of 33.33 per cent and 15 per cent of import parity, respectively. Naik said mechanisms to administer these subsidies from the fiscal budget would need to be put in place. Stating that prices of domestic LPG, kerosene and diesel had a direct bearing on fares of goods and public transport, Naik said in conditions of extreme volatility in international prices, the steep upward rise in consumer prices of these products would need to be managed to contain the impact of reasonable limits. Government on Thursday committed to dismantling the Administered Pricing Mechanism (APM) for the petroleum sector by March 31, 2002, but said a suitable mechanism to cushion the impact of volatile international prices on domestic prices need to be devised.
There appears to be a need for devising a suitable mechanism to cushion the impact of volatile international price on the domestic prices, he said. “Besides, the oil pool deficit which is expected to be around Rs 14,500 crore by the end of current fiscal, would need to be done away with. Various options of doing that are being currently looked into,” Naik added.
Bureau Report