The Tribune, Chandigarh, India

Sunday, March 17, 2002, Chandigarh, India

THE TRIBUNE SPECIALS

50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS

M A I N N E W S

LPG cheaper by Rs 20
Tribune News Service

New Delhi, March 16
In an apparent sign of succumbing to public and political pressure, the Centre today announced a partial rollback of the hike in LPG prices and from tomorrow, an LPG cylinder will cost Rs 20 less than the existing price.

In Delhi domestic cooking gas will now cost Rs 240.45 per cylinder, down from the Rs 259.95 which was applicable from March 1 after Finance Minister Yashwant Sinha announced a Rs 40 hike in his Budget speech for 2002-2003.

However, the Centre has announced no revision of the earlier decision to increase the price of kerosene by Rs 1.50 per litre.

The new prices of LPG will be effective from this midnight Petroleum Minister Ram Naik said in the Lok Sabha today.

The decision to execute a downward revision of the LPG price will involve an additional Rs 700 crore subsidy burden for the Centre. The Budget had calculated the subsidy burden on LPG and kerosene at Rs 4,495.80 crore.

The price of crude oil in the international market has shown a discernible upward trend and has shot up to over $ 23 a barrel. The budgetary decision to increase the price of LPG was calculated on a price line of Rs 20 per barrel of crude oil in the international market.

The Petroleum Minister said the decision to reduce the price of LPG was taken in spite of a difficult price situation of crude oil in the international market and it would benefit an estimated 6.3 crore households.

The decision to reduce the price of LPG follows strong representations made by various political parties and consumer groups.

Soon after Mr Naik completed his statement in the Lok Sabha, Opposition members demanded a total rollback in the price hike of LPG.

Minister of Parliamentary Affairs Pramod Mahajan said the issue could be discussed during the time of the debate on the Budget.

Mr Sinha, who has earned for himself the sobriquet of “rollback minister,” told newspersons that he was “happy that even after the rollback, the subsidy on LPG had been reduced by Rs 20”.

“You may call me rollback Sinha. But it is not unusual for a Finance Minister to bring amendments to the Finance Bill,” Mr Sinha said.

The Finance Minister took a dig at the industry also and said the industry favoured a reduction in subsidy only when it did not affect them.

Meanwhile, it is learnt that the Centre has directed public sector oil companies not to increase prices of diesel and petrol immediately after the market determined pricing regime comes into place from April 1, 2002.

The Centre wants to avoid a situation where a sudden increase in the prices of international crude oil is not immediately passed on to the consumer, it is learnt.

Indian LPG, kerosene prices lowest in South Asia

New Delhi, March 16
The prices of domestic cooking gas (LPG) and kerosene for the public distribution system (PDS) in the country are the lowest in South Asia.

The price of domestic cooking gas in Delhi is Rs 240 (after a decrease of Rs 20 per cylinder), lower than the cost of Rs 285 per cylinder in Pakistan, Rs 265 in Bangladesh, Rs 300 in Sri Lanka and Rs 347 in Nepal, official sources said.

Even after an increase of about Rs 1.50 per litre announced in the Budget, the price of kerosene for PDS in Delhi at Rs 8.92 a litre is lower than the Rs 11.56 per litre price in Pakistan, Rs 14.44 in Bangladesh, Rs 9.06 in Sri Lanka and Rs 10.73 in Nepal.

Kerosene and LPG are subsidised to the extent of 33 and 30 per cent of the import parity price while petrol and diesel prices are higher than the international price to cross-subsidise the cooking mediums.

After the Re 0.50 per litre reduction in the price of diesel, the majorly consumed transport fuel is priced at Rs 16.59 per litre in Delhi which is higher than Rs 12.39 in Pakistan, Rs 14.44 in Bangladesh and Rs 16.31 in Sri Lanka. Only Nepal has a price higher than India at Rs 16.73 per litre.

The Re 1 one per litre reduction in price of petrol in Delhi is higher than Rs 26.64 in Pakistan, Rs 23.78 in Bangladesh and Rs 27.09 in Sri Lanka. Petrol in Nepal is priced at Rs 29.04 per litre. PTI

Oil PSUs not to hike price of petrol, diesel: Naik

New Delhi, March 16
Petroleum Minister Ram Naik today ruled out the possibility of any increase or decrease in the prices of petroleum products, including LPG or kerosene, till the middle of this year.

In an exclusive interview with UNI after announcing reduction in the prices of LPG by Rs 20 per cylinder in Parliament, the minister said the government wanted that the change-over from the Administrative Price Mechanism (APM) to complete de-regulated era should be smooth.

There have been fears among consumers that prices of the LPG, kerosene, petrol and diesel in the deregulated period are bound to rise in view of the increase in crude oil prices in the international market.

He admitted that prices of crude in the international market had been showing firmness in the past two weeks and the subsidy on LPG had increased to around 30 per cent (Rs 90 per cylinder) but the government had decided to keep the subsidy level around this mark with an object that consumers were not hurt. As per the 1997 decision, the subsidy on kerosene should not be more than 33 per cent in the deregulated period and 15 per cent in case of the LPG. The government has decided to reduce the subsidy level on kerosene and the LPG in next three to five years period.

In the de-regulated period, commencing from April 1, oil companies will be free to fix retail prices of all petroleum products but the government has decided that it will keep adjusting excise and customs duties on petroleum products, in case crude oil prices showed further uptrend.

Mr Naik said even at present, the oil companies had to incur a loss of Rs 2 crore every day.

Mr Naik said oil companies were gearing themselves for the de-regulated period and making their plans accordingly.

While the government will not have a say in fixing the prices of petroleum products directly following dismantling of the Oil Pool Account, oil companies will continue to take advice for any revision in prices, according to highly placed sources.

“Since marketing of petroleum products from April 1 will be in the hands of public sector oil companies, they will keep prices at the current level for some time,” sources added.

Diesel and petrol prices in the first three months of this year have been revised downward twice while the LPG and kerosene prices increased by Rs 40 per cylinder and Rs 1.50 per litre on February 28. With the cut in the LPG price by Rs 20 per cylinder today, consumers still have to shell out Rs 20 more than before February 28.

Mr Naik said he would also have a meeting of chairmen of oil companies and others involved in the marketing of petroleum products before March 31 to assess the smooth switch over from the APM to deregulated period.

The government would take whatever necessary steps required for the switch over, he added. UNI