Govt. firm on deadline to dismantle APM

By Our Special Correspondent

NEW DELHI, SEPT. 22. The Government today declared that the deadline for dismantling the Administered Pricing Mechanism (APM) set for April 1, 2002, would be met. This was decided at a meeting between the Petroleum Minister, Mr. Ram Naik, and the Finance Minister, Mr. Yashwant Sinha, where both the issues of dismantling APM and the impact of any impending conflict following the terrorist attack in the U.S. on the oil economy were discussed at length.

The Finance Minister indicated after the meeting that a review of the duty structure on petroleum products would also be carried out based on the report of an empowered technical group. The group had suggested a cut in customs duties and a hike in excise duties in some cases.

Mr. Naik told presspersons that the countdown for dismantling APM had begun. Aviation Turbine Fuel (ATF) pricing had already been freed since April this year and the remaining four products - petrol, diesel, kerosene and cooking gas - would be deregulated by the target date next year, he said.

He had earlier written to Mr. Sinha to consider rolling back the duties to the pre-budget level as part of efforts to bring down the oil pool deficit, estimated to touch Rs. 14,500 crores during the current financial year.

Mr. Naik noted that a preliminary round of discussions had been held today on dismantling the APM while details would be finalised in the coming months.

He said that post-APM, kerosene for the public distribution system and domestic LPG supplies would continue to have a subsidy of 33.3 per cent and 15 per cent of import parity respectively. This level of subsidy would be provided directly from the general budget rather than being handled through the oil pool account where it contributed to creating the pool deficit. At present, the deficit is expected to reach Rs. 14,500 crores by the end of the current fiscal. He said that ways and means of liquidating the deficit would be worked out later in the year. Officials disclosed that domestic LPG prices would have to be raised by Rs. 95 a cylinder to reach the residual subsidy level while in the case of kerosene this would have to rise by Rs. 1.50 per litre. The other option would be to reduce customs and excise duties on these products to avoid any burden on consumers.

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Section  : National
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