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Meet on petro products APM inconclusive

Our Bureau

NEW DELHI, Aug. 9

THE high-level meeting convened by the Finance Secretary, Mr Ajit Kumar, on Thursday to thrash out issues involved in the dismantling of the administered pricing mechanism in petro-products scheduled for April 1, 2002 remained inconclusive, with a consen sus eluding the Finance and the Petroleum Ministries on the operational modalities for deregulating the sector.

At stake is the fate of the oil pool deficit, setting up of a downstream regulator, product price stabilisation mechanism and continued distribution of petro-products to remote areas.

With the oil pool deficit forecast between Rs 11,000 and Rs 12,000 crore by the end of the current fiscal, the Government is toying with a slew of options -- including issuance of bonds to oil companies; retaining the deficit as a `receivable' on the bal ance sheet of oil companies; duty rationalisation and enhancement of administered prices.

On the price stabilisation front, deregulation exposes mass consumption products such as kerosene, diesel and LPG prices to the volatilities in the world market. The Government is mulling a price stabilisation fund to hedge such fluctuations.

Also, with the growth of mass consumption petro-products being flat, the Government is examining the issue of gains to the consumer from deregulation. This is because in the absence of any significant growth in demand, new entrants might poach into the s econdary network of the existing oil marketing companies. This, in turn, may translate into higher costs for consumers.