Government to address oil marketing companies' losses; Chaturvedi committee proposals impractical

20 August 2008

The government has said that it would not be a silent witness to the compounding losses of oil and marketing companies. Oil secretary R S Pandey has said that under recoveries need to be addressed quarter by quarter, and that the government cannot be a mute witness to the public sector oil marketing companies slipping further into the red.

Pandey also said that the IOC has been assured by the public sector oil companies that there would be no shortage of petroleum products in the country, and that oil manufacturing companies would provide pending LPG connections within the coming two months.

In an interview with CNBC-TV18, Pandey said that under-recoveries, better known as losses, would have to be provided for by either upstream companies or bonds. A nod from the Parliament is needed for the next portion of oil bonds, and that would be sought during the next session of Parliament.

On differential pricing of diesel, Pandey said that it is tough to administer differential pricing of diesel in metros. ''Metro users should be discouraged by levying additional charges,'' he said.

Pandey also said that the ministry of petroleum and natural gas would focus on demand management and address shortages by improving consumption efficiency and strengthening petroleum distribution networks. He said this would be an exercise that covers many sectors, and would not be confined to petroleum and natural gas alone.

A meeting between officials of the petroleum ministry and the public sector oil companies, chaired by petroleum minister Murli Deora has said that a formal view on the recommendations of the Chaturvedi committee would be taken after comments from stakeholders are received in writing.