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APM: Naik, Sinha discuss fiscal issues
By Our Special Correspondent
NEW DELHI
FEB. 11.
The Union Petroleum Minister, Ram Naik, today hinted that petrol and diesel prices may fall after the administered pricing mechanism (APM) for the oil sector is dismantled even while stressing that there are no differences on this issue within the Government.
Mr. Naik told newspersons that fiscal issues related to the petroleum sector including excise and customs duty levels as well as the nature of subsidies were discussed during a three hour long meeting here with the Finance Minister, Yashwant Sinha. The meeting had been held to resolve all the issues related to APM dismantling so that the budget proposals can incorporate enabling provisions on changes in excise and customs duties. Decisions on subsidy on products such as kerosene and LPG also have to be taken since the Oil Pool account system is being wound up and the burden would fall on the general budget. Mr. Naik said "budget-related issues" were taken up at the meeting. On administered pricing mechanism for the oil sector, he said it would definitely begin to be dismantled on April 1 this year. Asked about prospects of petrol and diesel declining after being linked to import parity, he said it would be good if prices come down since everyone wanted them to fall.Regarding deregulation of oil marketing, he said the Petroleum Ministry has circulated Cabinet notes on issues such as role of new refineries and the creation of a oil regulatory authority. He indicated, however, that most of the fiscal issues relating to excise and customs duties on refinery investments as well as on crude and petroleum projects would be outlined in the 2002-03 budget.
Asked whether the Finance Ministry has agreed to take on the burden of subsidy in the petroleum sector, he declined to comment. He insisted that there were no differences between the Finance and Petroleum Ministries on APM dismantling. As for the reason for referring the subsidy issue to the Prime Minister, Atal Behari Vajpayee, he said it was the Cabinet which had authorised him to take a final decision.
Earlier, Mr. Naik presided over the signing of a protocol on cooperation in energy, oil and gas, infrastructure with Kazakhstan after a meeting of the Indo-Kazakh Joint Commission on Trade and Economic Cooperation.
The Kazakh Energy Minister, Vladimir Shkolnik led the Kazakh delegation to the meeting being held as a prelude to the arrival of the Kazakhstan President, Nursultan Nazarbaev, here for a four day official visit.
The Kazakh side proposed participation of ONGC Videsh in the tender for exploitation of the oil and gas field "Karazhanbas-Sea" and the gas field Amengaldi.
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