Date:07/07/2009 URL: http://www.thehindu.com/2009/07/07/stories/2009070754881100.htm

National

Panel to study decontrol of petroleum sector

Sujay Mehdudia

NEW DELHI: Seeking to set in motion the process of a possible decontrol of the petroleum sector, Finance Minister Pranab Mukherjee on Monday announced the setting up of an expert group on the pricing of petroleum products, in keeping with the movements in international markets.

“The government will set up an expert group to advise on a viable and sustainable system of pricing petroleum products,” Mr. Mukherjee said while presenting the budget. The details would be announced by Petroleum and Natural Gas Minister Murli Deora. However, Mr. Deora said discussions were still on and a final decision would be announced shortly.

To give a big push to use of environment-friendly bio-fuels, Mr. Mukherjee fully exempted from excise duty, petrol and diesel blended with bio-diesel obtained from vegetable oils.

Currently, petrol attracts a basic central excise duty of Rs. 5.35 a litre plus Rs. 6 a litre special additional excise duty. Diesel on the other hand, is levied a duty of Rs. 1.60 a litre.

To encourage the use of bio-diesel and augment its availability, Mr. Mukherjee announced a reduction in basic customs duty – from 7.5 per cent to 2.5 per cent, bringing it on par with petrol and diesel.