Government working on new fuel subsidy mechanism: Deora
02 Nov 2010
The ministry of petroleum and natural gas is currently working on a new subsidy management mechanism for petroleum products, petroleum minister Murli Deora said on Monday.
He, however, ruled out dual pricing of diesel.
Speaking on the sidelines of Petrotech 2010 exhibition and conference being held in the capital, Deora said the government was working on a new mechanism to manage fuel subsidy, which, at current levels, are unmanageable.
"We are working on a subsidy mechanism as it is very difficult to implement dual pricing of diesel," Deora said. "Why should the government provide a subsidy of Rs3 per litre on diesel for people who ride in Mercedes and other expensive automobiles?" he asked.
He said with the country importing around 70 per cent of its crude oil requirements, the administrative price mechanism has only helped to extend losses for state-owned fuel oil refining and marketing companies.
The high import prices of crude coupled with the administered price mechanism has led to continued under-recoveries on the sale of petrol, diesel, LPG (domestic) and kerosene, he pointed out.
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