Monday, December 12, 2011

Government to free diesel, LPG prices after weighing impact

New Delhi, Dec 12 (IANS) The government would deregulate diesel and liquefied petroleum gas (LPG) prices only after considering their impact on the weaker sections of the society, Minister of State for Petroleum and Natural Gas R.P.N. Singh said Monday.

'We as policy makers and politicians have to mediate between the social, economic and environmental attributes of energy. We have to move cautiously to ensure that our decisions are equitable and lead to balanced growth,' said Singh, addressing the 10th Petro India conference here.

While the government had in June last year decontrolled petrol prices, it continues to dictate retail rates of diesel, cooking gas (LPG) sold to households and kerosene sold through the public distribution system (PDS).

The minister said that while the government was protecting consumers, it had to shield the state-run oil and gas marketing companies from the impact of selling subsidised products.

'We import about 75 percent of our crude requirement from overseas. The government therefore has the huge responsibility of protecting not only consumers but also our major oil and gas companies,' Singh said.

Singh said there was a need to target subsidies directly to the weaker sections of the society in the case of cooking gas.

'While certain subsidies may be necessary in view of the larger social objectives, they need to be administered directly to specific targeted end-users and provided in a transparent way through clear budgetary mechanism,' he added.

The minister also urged well-to-do sections to give up subsidised LPG voluntarily.

The government in the current fiscal will have to bear a energy subsidy burden of more than Rs.180,000 crore, which might increase due to a depreciating rupee.

Singh said there was a need to carry out energy pricing reforms across the segment of petroleum and gas products in order to attract investment and technology in the sector.

'Energy pricing reforms need to be carried out across the entire energy basket rather than segments of it so that there is neither inter-sectoral nor intra-sectoral cross- subsidization.'

1 comment:

  1. It is not easy to deregulate, as there are other large Govt. sector consumers - defence & rail, also road transport another large area to be affected, which in turn can raise inflation...!

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