Prime Minister for phased rationalisation of fuel prices

"Energy remains under-priced in our country, with coal, petroleum products and natural gas prices well below international prices. The Central and State governments must work together to create awareness in the public on the need for curbing energy subsidies," Dr Singh said.

Prime Minister Manmohan Singh and Kerala Chief Minister Oommen Chandy exchanging pleasentaries at the foundation stone laying ceremony of BPCL's Integrated Refinery Expansion Project in Kochi on Monday. Photo: K.K. Mustafah.

Prime Minister Manmohan Singh on Monday reiterated his position of “phased rationalisation of energy prices to bring them in line with global prices” for “meeting the target of rapid, inclusive and sustainable development” and curbing energy subsidies.

Speaking at the foundation laying ceremony of integrated refinery expansion project of Bharat Petroleum Corporation Ltd. (BPCL) here, Dr. Singh recalled his speech at the National Development Council meeting in New Delhi in which he hinted about the pricing of energy.

“Energy remains under-priced in our country, with coal, petroleum products and natural gas prices well below international prices. The Central and State governments must work together to create awareness in the public on the need for curbing energy subsidies,” he suggested.

The country needed “adequate supplies of energy at affordable prices” for achieving the target of rapid industrial and economic growth.

“Oil and gas would continue to meet a large part of the energy requirements for many years to come. The country was dependent on imports for meeting a major portion of the crude oil requirements. Hence, it required large-scale investments in oil and gas exploration within the country, acquisition of oil and gas producing assets overseas and strengthening of the marketing and distribution infrastructure in the country, he said.

Dr. Singh said that the government was committed to “encouraging companies to undertake domestic exploration for oil and gas.” Public sector companies were also looking at opportunities abroad. BPCL had made some significant successes in the upstream exploration and production sector, particularly in Mozambique and Brazil, he said.

The oil industry had undertaken the task of upgrading the quality of auto fuels with an investment of over Rs.30,000 crore from internally generated resources. Bharat Stage-4 petroleum and diesel would be introduced to cover another 37 cities by 2015. It had already been introduced in 26 cities, the Prime Minister said.

Union Ministers Veerappa Moily, Panabaka Lakshmi and Vayalar Ravi and Kerala Chief Minister Oommen Chandy attended the function.