Prime Minister Manmohan Singh will take stock of the current pricing of petrolium products and their impact on the bottom lines of the oil marketing and refining companies at a meeting here on Wednesday. Petroleum minister Murli Deora and finance minister Pranab Mukherjee, along with the chiefs of the public sector oil companies, would attend the meeting.
According to sources, Wednesday?s meeting would discuss issues of reimbursement of the pending under-recoveries of the public sector oil marketing companies on sale of domestic LPG and PDS kerosene. The policy of sharing of subsidy burden on petrol and diesel would also be reviewed. The meeting assumes added significance in view of the current rally in the international crude oil prices.
However, bigger issues like deregulation of the petroleum pricing as recommended by the Kirit Parikh committee are unlikely to be discussed in detail at the meeting. The committee is mandated to recommend ways to reduce the government?s fuel subsidy burden. The committee is also slated to submit its report on January 20. The total under-recoveries of the three OMCs from below cost sale of LPG and kerosene are in the range of Rs. 21,000 crore. ?At current estimates, this figure will go up to Rs 30,000 crore by March,? petroleum secretary RS Pandey told reporters here on Tuesday.
Upstream oil companies like ONGC and Oil India Ltd (OIL) have stated their difficulties in sharing OMCs? under-recoveries on the sale of petrol and diesel from the third quarter. They have desired that the government should also partially bear this burden. Besides, OMCs?which were exempted from sharing under-recovery on petrol and diesel in the past two years as a special case?should also be roped in.
While GAIL has also started contributing toward subsidy burden sharing in the current fiscal, ONGC and OIL are insisting that this mechanism should be formalised.
As contribution toward subsidy-sharing in the first half, ONGC forked out Rs. 3,059 crore, OIL Rs. 411 crore and GAIL India Rs. 533 crore to help the OMCs meet their under-recoveries on the sale of petrol and diesel.