Empowered Group of Ministers (EGoM) consider under-recoveries oil PSU

Ministers' panel on petroleum pricing may meet in June
An Empowered Group of Ministers (EGoM) constituted to look into the
issue of under-recoveries incurred by the public sector oil marketing
companies for selling petroleum products below the market price is
likely to meet early next month. Government officials said the EGoM
headed by the Finance Minister, Mr Pranab Mukherjee, would meet on
June 4 or 5 to consider changes in the petroleum retail price system.
The panel is expected to consider the report of the Kirit Parikh
committee that said prices of petrol and diesel should be deregulated,
while prices of PDS kerosene and cooking gas (domestic LPG) should be
raised.
The EGoM also includes the Petroleum Minister, Mr Murli Deora; the
Agriculture Minister, Mr Sharad Pawar; the Chemical and Fertiliser
Minister, Mr M.K. Alagiri; the Railway Minister, Ms Mamata Banerjee;
the Road Transport Minister, Mr Kamal Nath; and the Planning
Commission Deputy Chairman, Mr Montek Singh Ahluwalia.
The three public sector oil marketing companies have lost Rs 46,051
crore on selling petrol, diesel, domestic LPG and PDS kerosene below
market price in 2009-10. According to a formula for 2009-10, the
revenue loss incurred by the oil marketing companies on petrol and
diesel was to be met by upstream companies such as ONGC and the
Government was supposed to shoulder the under-recovery on cooking
fuel. While the upstream companies have borne about Rs 14,000 crore,
the Government has shouldered a burden of about Rs 26,000 crore for
the fiscal 2009-10.
APM gas price
The Cabinet is likely to consider raising price of gas sold under
administered price mechanism (APM) shortly. "The plan is to gradually
raise prices of APM gas to $4.20/mBtu," the official said.Gas produced
by ONGC and Oil India Ltd from fields given to them on nomination
basis are sold at APM price. The plan is to raise APM gas price from
$1.79/mBtu to $ 4.20/mBtu over the next three years.Price of gas
produced by ONGC and OIL from fields given to them on nomination basis
were last revised in 2005.Current APM rates of Rs 3,200 per thousand
cubic metres ($1.79/mBtu) was lower than $ 4.2/mBtu price of gas from
Reliance Industries Ltd operated Krishna Godavari fields

THIE HINDU BUSINESS LINE newspaper….New Delhi, May 18