The Planning Commission on Tuesday called for linking petrol and diesel prices with international markets and made a case for raising gas prices by public sector companies.

“Natural gas prices of PSUs (are) very low and need revision,” the Commission said in a presentation on Integrated Energy Policy (IEP) before the Plan panel meeting chaired by Prime Minister Manmohan Singh.

The Commission suggested there should be greater clarity on gas pricing policy in the eighth round of NELP (New Exploration and Licensing Policy).

It also called for linking petrol and diesel prices with international market and said that large subsidies in kerosene and LPG should be better targeted to benefit the below poverty line (BPL) families.

Subsidised prices of LPG and kerosene are “greatly misaligned and imply a very large subsidy. This is leading to huge uneconomic use and unintended benefits to certain classes of consumers and widespread adulteration of petrol and diesel,” the presentation said.

Favouring stable price regime in the oil sector, the presentation said, it would encourage private oil companies to develop retail network for sale of petrol and diesel.

“Private oil companies (are) not using/developing retail network for sale of petrol and diesel in the absence of stable price regime,” it said.

The coal pricing policies are “distorting market demand... and they should ideally be left to the market and trading of coal, nationally and internationally, should be free,” the presentation added.

Further it also suggested that high quality coking and non-oking coal, which are exportable, should be sold at export parity prices, while quantity of coal through e-uction be raised to at least 20 per cent, from around 10 per cent now.


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