CorporateReliance, Essar, Shell for freeing petrol, diesel prices
With global oil rates stabilising at around $70-80, Reliance Industries, Essar Oil and Royal Dutch/Shell today joined the chorus for freeing petrol and diesel prices to give private sector a level playing field as also lower government"s subsidy burden.
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Freeing prices would mean a Rs 3.85 a litre increase in petrol and Rs 3.71 per litre hike in diesel rates but the move would help state firms who are reeling under severe financial constraint in absence of promised subsidy from the government.
In separate presentations to the Kirit Parekh Committee on Fuel Pricing Reforms, the three firms said oil sector was the only sector where subsidy was limited to public sector firms, driving private competitors out of business.
"If prices are not freed, private sector should also be treated at par with PSUs (and given subsidy)," RIL said.
State-run Indian Oil (IOC) favoured freeing auto fuel pricing but wanted the government to first commit upfront to meet in cash the revenue lost on selling LPG and kerosene.
Oil and Natural Gas Corp (ONGC) said it was willing to share fuel subsidies but the mechanism should be transparent wherein incremental revenues it earned beyond a pre-decided threshold can be automatically parted for the same.
Currently, upstream firms like ONGC are asked to pick up the revenue retailers IOC, BPCL and HPCL lose on selling petrol and diesel. The revenue they lose on LPG and kerosene are met through issue of oil bonds but none have been issued this fiscal.