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Creation of strategic oil reserve sought

Special Correspondent

Panel wants subsidies to continue

New Delhi: In the light of volatility in global oil prices and the international geopolitical concerns, a parliamentary committee has urged the Government to set up a strategic crude oil reserve with a "sense of urgency for meeting short term supply disruptions."

The standing committee on petroleum and natural gas, which tabled its report in Parliament, has said it is "not satisfied" with the pace of progress on this vital project.

It is "unhappy to learn" that the government is still in the process of initiating action to finalise the mode of financing even after more than one and a half years after forming a Special Purpose Vehicle.

The committee has also expressed regret that the government is delaying the development of a national gas grid on the lines of a transmission grid being set up by the Power Grid Corporation.

"The committee is unhappy to note that the development of the national gas grid to address the burning issue of ensuring regional balance especially in eastern and southern regions has been delayed inordinately," it says.

In addition, it has suggested that the Government continue subsidies on LPG and kerosene, revive the anti-adulteration cell and select suitable locations on the east coast for setting up LNG terminals.

Keeping the interests of the common man in mind, the committee has urged the government to continue subsidy on LPG and kerosene beyond the deadline of March 2007 by using a part of the cess collected on indigenous crude oil.

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