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Saturday, May 30, 2009
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Deora hints at de-regulation of petrol, diesel prices

Special Correspondent

The decision would be put up before Cabinet in two months

— Photo: S. Subramanium

Assume charge: Minister of Petroleum and Natural Gas Murli Deora with Minister of State Jitin Prasad after taking charge in New Delhi on Friday.

NEW DELHI: Petroleum and Natural Gas Minister Murli Deora on Friday hinted at de-regulation of petrol and diesel prices. He also talked about increasing the rates for natural gas sold by state firms.

Beginning his second tenure in the Ministry along with Minister of State Jitin Prasad here, Mr. Deora said the decision on de-regulation would be put up before the Cabinet in six-eight weeks. The process was already on.

The Ministry had already prepared separate Cabinet notes for giving the state-run Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited freedom to fix prices when crude rates were below $75 a barrel.

A note was also prepared for raising rates for natural gas produced by the Oil and Natural Gas Corporation (ONGC) and Oil India Limited from fields given to them on a nomination basis.

Mr. Deora, first person to be reappointed Petroleum Minister, promised to release rural LPG distributorship in the first 100 days of his assuming office. “At present, 9,350 LPG agencies cover only 50 per cent of the population and we want to extend the coverage to every nook and corner. The Gramin LPG Vitrak scheme would be launched at locations having potential of up to 1,000 refills per month,” he said.

Officials said that once prices were deregulated, retailers would get to fix petrol and diesel prices periodically — maybe once a fortnight or a month.

Mr. Deora indicated that the ONGC was losing about Rs. 2,500 crore annually on selling natural gas at artificially subdued rates.

However, his first priority would be to get VIII round of auction of oil and gas exploration blocks on track by getting a tax holiday for natural gas production.

The round had been suspended because of concerns over investor backlash in the absence of a seven-year income tax holiday. “We hope to re-launch NELP-VIII in a month’s time as also revive the initial public offering of the nation’s second largest exploration firm, Oil India.”

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