The Government will consider deregulating petrol and diesel prices as also increasing rates of natural gas sold by state firms, said Murli Deora, who began his second term as Petroleum Minister on Friday.

“The issue of deregulation is being discussed and it will be put up to the Cabinet for a decision,” he said after taking charge of the Petroleum Ministry.

Asked about the time-frame during which the decision is likely, he said: “In about six weeks.”

Jitin Prasada, one of the young turks of Congress, also took over as Minister of State for Petroleum.

Separate draft Cabinet notes are ready for giving state- run IndianOil, Bharat Petroleum and Hindustan Petroleum freedom to fix petrol and diesel prices when crude oil rates are below USD 75 a barrel and raising rates of natural gas produced by Oil and Natural Gas Corp (ONGC) and Oil India Ltd from fields given to them on a nomination basis.

Deora, who became the first person-ever to get reappointed as Petroleum Minister, will introduce a rural LPG distributorship in the first 100 days.

“At present, 9,350 LPG agencies cover only 50 per cent of the population and we want to extend the coverage to every nook and corner,” he said. “The Gramin LPG Vitrak scheme would be launched at locations having potential of up to 1,000 refills per month.”

In his second stint, maybe he will finally usher in reforms in auto fuel pricing, taking advantage of low crude oil prices.

Once deregulated, fuel retailers will get to fix petrol and diesel prices periodically — maybe fortnight or once a month.

Also on Deora’s menu is raising rates of natural gas produced by state-run firms like ONGC which is losing about Rs 2,500 crore annually on selling the fuel at artificially subdued rates.

“Gas will follow fuel prices,” he said.

But his first priority would be get the 8th round of auction of oil and gas exploration blocks on track by getting tax holiday for natural gas production. The round had been suspended because of concerns of investor backlash in the absence of a seven-year income tax holiday.

“We hope to relaunch NELP-8 in a month’s time,” Deora said. Reviving the initial public offering of the nation’s second largest exploration firm, Oil India, would also be high on agenda.

Industrialist-politician Murli Deora broke the jinx at one of the country’s wealthiest ministries by being reappointed as Minister for Petroleum and Natural Gas.

The Ministry has a history of no minister ever returning to office and none ever completing a five-year term. The BJP’s Ram Naik has so far been the longest-serving Oil Minister, having been at the helm for four and a half years during 1999-2004.

Widely considered pro-US and pro-business, 72-year-old Deora in January 2006 was para-dropped as Cabinet minister of this vital ministry that touches the lives of almost all people some way or the other.

Deora, who replaced diplomat-turned-politician Mani Shankar Aiyar, took time to learn the ropes but soon had his hand on the pulse and this was reflected when he stonewalled attempts to pass on last year’s record spike in international crude oil prices to consumers.

He succeeded in largely insulating consumers from increasing the prices of petrol, diesel, domestic LPG and kerosene in the international market.

Deora, who had never held a ministerial position before in his Parliamentary career that began with his election from Mumbai South constituency in 1985-89, for many years has been Congress party’s principal interface with industry.

An avid Bridge player, Deora is not only close to industrialists but also has deep links in the US, including knowing personally some of the Senators.

Deora this year broke a strike by the powerful officers of oil PSUs just when the agitation had begun to hurt the economy by crippling fuel supplies to customers and industry.

Separate draft Cabinet notes for giving oil firms freedom to fix petrol and diesel prices when crude prices are below USD 75 a barrel and raising rates of natural gas produced by ONGC and OIL from nominated fields are ready.

At these levels, state-run oil retailing firms would compete to fix consumer price. In the event crude oil crosses the USD 75-per-barrel mark, the Government would intervene in the market to lessen the burden on the common man through a sharing of the revenue losses of retailers among the national treasury and upstream oil and gas companies.

Currently, the Government control of the prices of automobile and cooking fuels forces state-run refiners to sell oil products below cost and the losses are partly borne by exploration companies.

Also on agenda will be increasing price of gas that ONGC produces from fields given to it on a nomination basis. ONGC currently gets about USD two per million British thermal unit while gas from fields operated by UK’s BG is sold at USD 5.70 per mmBtu.

source: deccanherald.com

Tags: bpcl, gove oil deregulate, HPCL, ioc, oil deregulate, oil deregulation, ONGC, petro price deregulate, reliance ind

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