Finance Minister Yashwant Sinha has announced the dismantling of the administered price mechanism (APM) in the petroleum sector from 1 April 2002.
Presenting the Union Budget for 2002-03, Sinha said the Oil Pool Account will be dismantled from the same date and the outstanding balances liquidated by issue of oil bonds to the concerned oil companies.
With the dismantling of APM, the pricing of petroleum products will become market determined. A Petroleum Regulatory Board will be set up to oversee the sector, Sinha stated.
The FM has imposed the Cenvat rate of 16 per cent on LPG and kerosene as against the earlier concessional rate of 8 per cent. As a result, the price of an LPG cylinder has gone up by Rs 40 while kerosene users will have to cough up an additional Rs 1.50 per litre. The new prices take effect from 1 March 2002.
The prices of petrol and diesel will come down by about Rs 1 and 50 paise, respectively, from 1 March 2002, Sinha stated.