Oil & Gas reforms on front burner

Jan 22 2013, 12:11 IST
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M Veerappa Moily, petroleum minister M Veerappa Moily, petroleum minister
SummaryThe UPA government is going the whole hog on its plan to move towards fully market-determined pricing of diesel, which accounts for 60% of this year’s estimated fuel subsidy bill of Rs.1.7 lakh crore.

subsidy payouts.

The 2006 Rangarajan committee, which proposed trade parity pricing contended import-parity pricing amounted to allowing OMCs to enjoy a rent akin to ocean freight and associated costs while export-parity price would put domestic refineries, especially PSUs, at a disadvantage. “Effective benefit from import duty protection and various notional expenses amount to about 4-5% for OMCs on the key products, impacting GRMs by about US$3/bbl which they stand to loose in case of full export parity pricing,” according to Emkay Global Financial Services.

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