Murli Deora

New Delhi: The Government is trying hard to avert a hike in the prices of petroleum products, especially kerosene and liquefied petroleum gas, to protect the common man from spiralling inflation.

The Petroleum and Finance Ministries are evolving a package, including issue of oil bonds and tapping funds in the old oil pool accounts, to ensure that the finances of the public sector oil companies remained unaffected while simultaneously containing prices.

Rangarajan panel

Though the Rangarajan Committee, set up to examine the entire gamut of pricing, is yet to submit its report, Petroleum Minister Murli Deora is working on avoiding implementing the recommendations, which may include price rise proposals.

"We will endeavour to avoid a price hike of all products, especially kerosene and LPG," he told The Hindu .

The efforts were being made in consultation with Finance Minister P. Chidambaram, who was also concerned about protecting the weaker sections from the adverse impact of a spurt in prices.

A fresh tranche of oil bonds, estimated at Rs. 11,000 crore, was one way of compensating oil companies for selling products at prices much lower than the current world rates. Additionally, funds could be drawn from the old oil pool account, estimated at over Rs. 5,000 crore.

Need for food subsidy

Highlighting the need for subsidy for cooking fuels, Mr. Deora said huge amounts were earmarked for food subsidy, including to public sector giants such as the Food Corporation of India. "What about the need to cook this food? Subsidy is required for this purpose also."

At the same time, Mr. Deora said, Mr. Chidambaram was seeking to address the issues raised by Prime Minister Manmohan Singh on the need to maintain the profitability of the public sector oil companies. They were facing huge losses in the current fiscal owing to their inability to raise product prices in line with the surge in international crude prices.

On the Iran-Pakistan-India gas pipeline, he said the Government remained committed to the project despite any difficulty that might come in the way of implementation. Talks would be held on Thursday with the visiting Pakistan Oil Minister. Later meetings would be held with Iranian authorities.

`Mulford offered help'

In the context of ensuring energy security, Mr. Deora supported Dr. Singh's initiative in the area of nuclear power, which would enable the country to reduce its dependence on oil imports.

On the failure of U.S. majors to bid for oil and gas exploration in India, the Minister said he had met Ambassador David Mulford in this regard.

"He has assured me that he will help."

Mr. Deora is visiting Houston shortly to take part in roadshows and canvas for participation in the next round of the new exploration licensing programme.

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