Although the phased programme for the oil sector reforms stipulates that before the end of the current fiscal, the government should increase the prices of kerosene (30 per cent of existing ex-storage price) and LPG (by withdrawing 33 per cent subsidy), minister for petroleum and natural gas V K Ramamurthy said a "big question mark" hangs over the sensitive issue.

During his interaction with economic editors on Friday, he said the government has not taken any decision on eliminating subsidies on petro products like kerosene and LPG.

He said, "I am not in a position to say if subsidies will not be withdrawn as a big question mark hangs over the issue which is sensitive. I cannot say when it would be done."

The minister added that theCabinet was yet to decide on the issue, pointing out that "you cannot have every decision on the dotted line". Any unexpected eventuality can arise, he said without elaborating on the issue.

The subsidy burden on the government on the two petroleum products is to the tune of Rs 7,000 crore per annum. Subsidy on LPG alone work outs to Rs 72 per cylinder and on kerosene to Rs 4.50 per litre.

During the previous United Front regime, the Nirmal Singh committee had worked out a five-year timetable for phased dismantling of the APM between 1998 to 2002 based on the recommendations of the restructuring group (R group) headed by the then petroleum secretary Vijay Kelkar.

The R group had suggested sweeping changes to deregulate the hydrocarbon sector with a view to making it more internationally competitive. The APM dismantling started on April 1 with price controls on petro products barring diesel, petrol, kerosene, LPG and aviation turbine fuel being withdrawn.

The committee had suggested that the subsidy onLPG be reduced to 15 per cent of import parity and that on kerosene to 33.33 per cent of the import parity in the terminal year of the APM dismantlement, that is in 2002. When full deregulation of the industry comes into force thereafter, the subsidies on LPG and kerosene would be transferred to the fiscal budget of the government.

Referring to the issue of oil pool account, the minister said a surplus of Rs 10,000 crore was generated mainly due to reduction in oil prices in the international market. This had helped the OCC to reduce the oil pool deficit from Rs 18,000 crore to Rs 8,000 crore now. The bulk of the money was utilised to retire oil bonds.To a question on whether some of the loss-making public sector oil companies would be merged, Ramamurthy said, "I do not rule out the possibility of any merger or amalgamation to make these units viable."

On achieving self sufficiency in the oil sector, Ramamurthy said it was not possible to do away completely with oil imports but efforts would be reduce thedependence on them.

On future strategies, he said the government was focussing on acquisition of oil and gas producing properties in West Asia and Central Asia, Kazhakastan and US to augment indigenous oil production.

Import of LNG from West Asia was also being considered, he said.

Ramamurthy said the Centre was taking urgent measures to tackle the oil blockage on the Hazira-Bijapur-Jagdishpur (HBJ) pipelines caused by floods in Surat and Vadodra in Gujarat.

"Our ministry has taken all measures to deal with the situation and a contingency plan to supply fuel for four power plants has been worked out," Ramamurthy said.

Government has already received information that waters were receding, he said and hoped that normalcy would be restored within a week.

The minister said alternate arrangements for fuel was being made from Mumbai and Haldia.

The Centre had on Thursday directed state-owned oil firms to draw up a contingency plan to tackle the emergency after flood waters submerged facilities of Oiland Natural Gas Corporation and Gas Authority of India Ltd at Hazira.

Plans were drawn up to supply liquid fuel to all the gas based power plants of National Thermal Power Corporation at Anta, Auria, Dadri in Uttar Pradesh and Delhi Vidyut Board.

Control rooms have been set up to monitor the situation and liquefied natural gas (LPG) situation has been reviewed and adequate stocks are available.

Supplies of kerosene and other petroleum products are being rushed to flood affected areas in Gujarat and despite heavy water logging the Gujarat refinery has continued near normal operations.