Kirit Parikh expects fuel price deregulation in June 7 meet

The Empowered Group of Ministers headed by Finance Minister Pranab Mukherjee is scheduled to meet on June 7, 2010 to discuss deregulation of fuel prices. The panel would take into account the recommendations put forth by the Kirit Parikh Committee on the issue.
Optimistic about significant measures being taken in the June 7 meet, Kirit Parikh, Member of the Planning Commission said deregulation would promote private sector presence in the oil marketing space.

Hopeful that both petrol and diesel would be freed in the meet, he said, “The government can free diesel prices and cut excise as well. But raising price without freeing it will not be of much gain.”

Further, he said, the consumers could bear hike in LPG prices. But the hike, he pointed out, would not happen if petrol was freed without excise cuts. “Cooking fuels may at best see modest hikes,” he said adding that the implementation of the UID scheme was essential for effectively targeting cooking fuel subsidies.

Commenting on the seriousness at the end of the policy makers, Parikh said, “The formation of an EGoM itself indicates that government wants serious reforms. Finance Minister has not provided much for oil subsidies in the budget and will need policy reforms to ensure low subsidies."

He also believed that gas transportation firm GAIL was not an upstream company and therefore should be excluded from subsidy sharing.

source:moneycontrol.com