Reacting to the proposed pilot project to reset fuel prices at retail pumps daily, the top Petroleum and Natural Gas ministry official said on Thursday that oil marketing companies enjoy pricing freedom for diesel, petrol and aviation turbine fuel, but must remain conscious of consumer interests as government-owned companies.
“We have moved away from administrative pricing regime for diesel, petrol and ATF. Except for kerosene, marketing companies are free to decide the price.
“The period also they are free to decide, whether they revise the prices every day or weekly,” said K.D. Tripathi, secretary in the petroleum and natural gas ministry
“We do not interfere in day to day matters of these companies… they are listed on the stock exchanges and are Maharatna PSUs. It is their freedom to take pricing decisions. We do not dictate such things nor do we restrict them,” Mr. Tripathi said, stressing that the oil marketing firms have been deliberating on a daily price reset option for ‘quite some time’ now.
The government had abandoned regulated pricing for petrol in 2010 and diesel in October 2014 and Mr. Tripathi said that he expected consumers to benefit from the change to a dynamic pricing regime of petroleum products.
“Prices as of now are linked to international prices. If the international prices cool down, the consumers will benefit. I don’t think it will be against the interests of the consumers,” he said.
“I can tell you one thing that – public sector oil marketing companies are quite conscious of the consumers’ interests.”
He added, “As a public sector company, they have to be responsible towards the consumer also,” Mr. Tripathi said.
Levy review?
When asked if the high taxes levied on petroleum products in the past two years would be wound down in light of rising oil prices, Mr. Tripathi said the government was conscious of the issues at stake and would take a decision at the appropriate time.
“As regards taxation, the government takes a call depending on the total market scenario – including the international prices, domestic requirement and depending on that, a tax regime is decided for petroleum products because these are sensitive products. Everybody in the country is affected, including the poorest of the poor,” he said.
“The government definitely takes a call on the taxation regime for every commodity, more so about this commodity.
“Our companies have been demanding that these petroleum products should be brought under the Goods and Services Tax regime, for which states have to be consulted.
There are other issues too… so the government is conscious of this and will take a decision at the appropriate time,” Mr. Tripathi added.
The secretary sought to play down the interpretation of the Budget proposal of an integrated public sector ‘oil major’ as a possible merger of all oil PSUs into one behemoth entity.
‘No mega PSU’
“So far as I understand, it was not the intention of the Finance Minister to say that there will be one single mega oil company. That was perhaps not the intention. His Budget speech announced a broad policy framework, which talks of integration; mergers and acquisitions can be done with a view to have larger mega companies that can have global presence,” said Mr. Tripathi.
“Keeping that in mind, our companies will consider as to where it is in their commercial interest to benefit from synergies and they can come up with an appropriate proposal.
“And the government will also see where its shareholding is involved, to see the process, examine all proposals and take a call,” he underlined.
Published - April 13, 2017 09:27 pm IST
