‘20’

    Shri Ram Naik stated that the Government would stick to its commitment to dismantle the Administered Pricing Mechanism by 31^st March 2002 in terms of the Government Resolution of November, 1997. With the provisions for meeting the subsidies on PDS kerosene, domestic LPG and the freight subsidy for far-flung areas, the budget proposals have paved the way for dismantling of Administered Pricing Mechanism as per the schedule.

    Ministry of Petroleum advised today the oil companies to decrease the price of petrol by around Rs.1 per litre, decrease the price of diesel by around Rs. 0.50 per litre, increase the price of PDS kerosene by around Rs.1.50 per litre and increase the price of domestic LPG by around Rs.40 per cylinder. The present revised retail prices of these products are given in the Annexure-I.

    Even after the above mentioned increases in the kerosene and LPG prices, prices of the domestic fuels in India are less than the prices of these fuels in the neighbouring countries namely, Pakistan, Bangaladesh, Nepal and Srilanka. For example, the revised price of kerosene in India(Delhi) is Rs.8.91 per litre as against Rs.14.44 per litre in Bangladesh i.e., the price in Bangladesh is 162% of the Delhi price. Similarly in Nepal, the price of kerosene is Rs.10.73 per litre, i.e. 120% of Delhi price. In the case of LPG also, the comparison shows that the revised price of LPG cylinder in India(Delhi) is Rs.260 as compared to Rs.265 in Bangladesh and Rs.347 in Nepal. The LPG prices in Bangladesh and Nepal are higher at 102% and 133% respectively of Delhi price.

    Cess on indigenous crude oil has been increased from the present level of Rs. 900 per tonne to Rs. 1800 per tonne. ONGC and Oil India are presently paid a price of Rs. 5570 per tonne for their crude oil. After of the dismantling of the APM, these companies would get the market determined oil price which would be higher than the price they are presently getting. It is expected that even after the increase in the levy of cess on indigenous crude, revenues of ONGC and Oil India would be higher than the present level.

    Oil pool deficit by the end of the present financial year is expected to be around Rs. 13,000 crore. As announced by the Finance Minister in his Budget Speech today, 80% of the outstandings of oil companies from the oil pool account would be liquidated by issuance of bonds at the time of the dismantling of the APM. Bonds for the balance amount would be issued after the accounts are duly audited. The bonds would be redeemed over a period of 7 years, would be transferable and carry the coupon rate of Government securities.

    With a view to ensure viability of the North East refineries namely, Bongaigaon, Guwahati, Digboi and Numaligarh concession to the tune of 50% of the excise duty payable on the petroleum products of these refineries have been announced in the budget proposals presented in Lok Sabha today. This would help in smooth transition of these refineries to the market determined scenario, said Shri Ram Naik.

    The revisions in prices and duties are coming into effect from the midnight tonight.