Private sector oil firms seek freeing of petrol, diesel prices

Private sector energy majors Reliance Industries, Essar Oil and Royal Dutch/Shell have sought freeing of fuel prices from government control for bringing about a level playing field for petro-fuel marketing in the country.

The three oil firms, making separate presentations before the Kirit Parekh Committee on fuel pricing reforms, said limiting oil subsidy to public sector units tended to drive private competitors out of business.

Freeing petro-fuel prices from government control would mean a Rs3.85 a litre increase in the price of petrol and Rs3.71 per litre hike in diesel rates across the board, which would in turn help state firms live sans government refinance of fuel subsidy.

With global oil prices ruling over $76 a barrel, such a move would also help reduce the government's subsidy burden.
 
"If prices are not freed, private sector should also be treated at par with PSUs," RIL said.

While state-run Indian Oil Corp (IOC) also favoured freeing auto fuel pricing, the company still wanted the government to continue compensating for revenue lost on selling LPG and kerosene.

State-run exploration company Oil and Natural Gas Corp (ONGC), on the other hand,  wanted a transparent mechanism for sharing fuel subsidies wherein incremental revenues it earned beyond a pre-decided threshold can be automatically parted with.