Friday,
March 1, 2002,
Chandigarh, India
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Govt control over oil prices goes
Tribune News Service and PTINew Delhi, February 28
The government today announced dismantling of the Administered Price Mechanism (APM) in the petroleum sector from April 1, 2002. Presenting the Budget for 2002-03 in the Lok Sabha, Finance Minister Yashwant Sinha also announced that the oil pool account will also be dismantled from the date and outstanding balances liquidated by issue of oil bonds to the oil companies concerned.  A petroleum regulatory board will be set up to oversee the sector, Mr Sinha said.
Mr Sinha said the subsidy on LPG and kerosene is to be reduced to 15 per cent and 33 per cent, respectively, by April, 1, 2002. Accordingly, an LPG cylinder will be costlier by Rs 40 and kerosene for PDS by Rs 1.50 per litre from March 1. As a result of the dismantling of the APM, the price of diesel will come down by around 50 paise and petrol by about Re 1. The government’s decision to
dismantle administered price mechanism for petroleum products will give freedom to petroleum companies to fix prices of petroleum products and private companies will be allowed to market their products.The bad news is the price of cooking gas and kerosene would continue to go up for the next three years as the government cuts subsidy in phases. In the first phase, the price of LPG has gone up by Rs 40 while that of kerosene has gone up by Rs 1.50. While the prices of petrol and diesel has come down due to the low prices prevailing in the international market, volatility abroad in the future could see the prices going up. Guidelines for the distribution will be notified later and the oil pool account will be dismantled on April one, 2002, Mr Sinha said.
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