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| Panel for LPG, Kerosene price hike, deregulation | | | Agencies
New Delhi, Feb 3: The Kirit Parikh Committee, set up by the government to draft a fuel pricing policy, today made a slew of recommendations including sharp rise in the cooking gas and kerosene prices, besides freeing retail pricing from the government regulations.
In a joint press conference with Petroleum Minister Murli Deora, Parikh said the country’s subsidy-driven fuel pricing policy has to be drastically overhauled to help the petroleum industry stay competent in an uncertain market environment.
The committee has recommended an increase of Rs 100 per LPG cylinder and Rs 6 per litre of kerosene.
At present, the subsidy burden per cylinder of LPG is Rs 287, said Parikh.
He has also said the oil marketing companies are suffering a loss of Rs 3 per every litre of petrol being sold, suggesting freeing up the retail pricing of the commodity from government regulations.“Diesel price has to be decided by the market,” said Parikh.
The oil marketing companies in India do not have a free pricing mechanism in which prices of fuels like LPG, kerosene, petrol and diesel are decided on the basis of international crude oil costs.
Instead, India follows a subsidised fuel pricing mechanism in which these fuels are sold by state-run oil marketing companies at a fixed rate even if international prices of crude go up. As a result, many OMCs sustain losses when selling prices are even lower than production cost.
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