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Oil prices: Manmohan Singh may meet FM and Petroleum Minister

Special Correspondent

Regulator in the petroleum and natural gas sector will soon be in place

New Delhi: In the wake of the Rangarajan Committee submitting its report on oil product pricing, Prime Minister Manmohan Singh may hold a meeting next week with Finance Minister P. Chidambaram and Petroleum Minister Murli Deora to discuss issues related to pricing and taxation.

Disclosing this here on Monday on the sidelines of the fourth Asia Gas Summit, Mr. Deora said the committee had submitted its report last week and the recommendations are being studied. He said the Government needed to go into the details before taking any decision. The committee had proposed a steep hike of Rs.75 per cylinder on domestic LPG price and a moderate rise of Rs.1.21 per litre on petrol and Rs.1.96 per litre on diesel prices. The committee had proposed duty changes and suggested restricting sale of subsidised kerosene to BPL families.

Earlier, delivering the inaugural address, the Minister assured that a regulator in the petroleum and natural gas sector would be in place in the near future.

A national gas pipeline policy is also likely to be finalised soon. He said these measures would provide a non-discriminatory and transparent platform that would give an impetus to the overall development of the natural gas sector.Referring to the need for eight to ten per cent economic growth, he said sustained energy availability is one of the key requirements for such growth.

The share of gas in the energy mix is likely to increase from the current nine per cent to 20 per cent by the year 2025. During this period, he said, the demand of gas is projected to increase from 150 million standard cubic metres a day to 390 million standard cubic metres a day.

He said his Ministry has sought infrastructure status for cross-country pipeline construction from the Finance Ministry as these form a crucial input cost for power and fertilizer plants. Power projects enjoy infrastructure status that gives them a 10-year tax holiday but gas pipelines that carry feedstock to these plants have not been granted the same concession.

On trans-national pipeline projects, he said the Government would have to extend sovereign guarantees to the investments being made. He said such pipelines require large investments for which international institutions and multilateral agencies will have to pool in resources.

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