Oil Ministry sources indicate that the long-term mismatches between domestic and international fuel prices are unsustainable. Sources say that it is essential to move towards market determined pricing, since there is no.....
Oil Ministry sources indicate that the long-term mismatches between domestic and international fuel prices are unsustainable. Sources say that it is essential to move towards market determined pricing, since there is no clear evidence that a full pass-through of international prices will stoke persistent inflation, reports CNBC-TV18’s economic policy editor Siddharth Zarabi.
The Oil Ministry has scheduled a briefing of the consultative committee of parliament. The briefing is scheduled to try and build political support across parties about what is the current situation when it comes to under recoveries and the petroleum pricing regime that is followed.
There are two-three points. First, the governments cash assistance, which had been sanctioned in July, Rs 15,000 crore for oil marketing companies, is yet to be disbursed.
Second, latest figures, as of September 30, indicate that Re 1 depreciation has hit the oil marketing companies by Rs 8000 crore an annum.
Third, the Oil Ministry is trying to explain to MPs that the current regime is one where petroleum prices are free to be set and reset by the petroleum companies. But diesel and LPG and kerosene, despite in-principal decision of the government to free up these prices, continue to be modulated.
The whole attempt from here on is to build up a political case for some sort of price action in the coming weeks or months. The Oil Ministry is going to tell the MPs that the Kirit Parikh Report has pointed out that even if there is a short-term negative impact on inflation due to increase in diesel prices, in the long run that evens that.
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Oil Ministry sources indicate that the long-term mismatches between domestic and international fuel prices are unsustainable. Sources say that it is essential to move towards market determined pricing, since there is no clear evidence that a full pass-through of international prices will stoke persistent inflation, reports CNBC-TV18’s economic policy editor Siddharth Zarabi.
The Oil Ministry has scheduled a briefing of the consultative committee of parliament. The briefing is scheduled to try and build political support across parties about what is the current situation when it comes to under recoveries and the petroleum pricing regime that is followed.
There are two-three points. First, the governments cash assistance, which had been sanctioned in July, Rs 15,000 crore for oil marketing companies, is yet to be disbursed.
Second, latest figures, as of September 30, indicate that Re 1 depreciation has hit the oil marketing companies by Rs 8000 crore an annum.
Third, the Oil Ministry is trying to explain to MPs that the current regime is one where petroleum prices are free to be set and reset by the petroleum companies. But diesel and LPG and kerosene, despite in-principal decision of the government to free up these prices, continue to be modulated.
The whole attempt from here on is to build up a political case for some sort of price action in the coming weeks or months. The Oil Ministry is going to tell the MPs that the Kirit Parikh Report has pointed out that even if there is a short-term negative impact on inflation due to increase in diesel prices, in the long run that evens that.
more info