The Hindu : National : Pranab to head GoM on oil pricing

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Thursday, Nov 29, 2007
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Pranab to head GoM on oil pricing

Sujay Mehdudia

In the absence of unanimity on revision

NEW DELHI: Prime Minister Manmohan Singh has appointed External Affairs Minister Pranab Mukherjee to head the new Group of Ministers (GoM) constituted to look into the “sensitive issue” of pricing of petroleum products.

It was set up in the wake of the persisting demand by oil marketing companies (OMCs) that the burden of increasing crude prices in the international market be passed on to consumers and the plea by the Petroleum Ministry that adjustments be made in the customs duties and excise structure of petroleum products.

The GoM will include A.K. Antony (Defence Minister), P. Chidambaram (Finance), Lalu Prasad (Railways), T.R. Baalu (Road Transport, Highways and Shipping), Sharad Pawar (Agriculture and Consumer Affairs) and Murli Deora (Petroleum and Natural Gas), highly placed sources said here on Wednesday. It would study all aspects of pricing and report back to the Cabinet within one month.

The government has been trying to evolve a political consensus on the issue of raising domestic fuel prices at a time when international crude prices are ruling at $96-100 a barrel. India imports nearly three-fourths of its crude requirement.

Loses per day

The public sector Indian Oil, Bharat Petroleum and Hindustan Petroleum together are losing over Rs. 250 crore a day on sale of petrol, diesel, LPG and kerosene. The GoM has become necessary in the absence of unanimity on raising prices and as the Finance Ministry is opposing the Petroleum Ministry’s proposal to cut excise duty on petrol and diesel to ease the burden on oil firms.

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