Hello Comrades,

I would like to bring to your notice about the much-awaited Kirit Parikh report on deregulating petroleum prices which will be submitted any time now. The Kirit Parikh panel was set up by the Centre to draft a fuel pricing policy, which will press for De regulation of petrol and diesel.

The government owned companies are happy that this report will address their existing problems and will also provide a level playing field to the private oil marketing companies.
So, while the report is expected to recommend full De-regulation of petrol prices, dual pricing formula is likely to be proposed for diesel subsidy for LPG and kerosene, to continue applying cess on crude after a certain level.

Now, the political leaders are very much concerned about freeing the petroleum product prices, at a time when inflation is the biggest concern?
The new oil secretary Mr. S Sundareshan who is also a part of Kirit Parikh report has assumed charge as the secretary of petroleum ministry at a very crucial time, especially when his task of nursing the oil marketing companies, bleeding from mounting under recoveries, is cut out. So he has a to play a balancing act, as addressing the problems of oil marketing companies like IOC, HPCL and BPCL is paramount, keeping the upstream companies like ONGC, OIL and GAIL, healthy is also equally important.
But after the finance ministry has virtually snubbed the oil ministry's demand of fully compensating the oil marketing companies under recoveries through bonds or cash, the petroleum ministry is likely to go with the suggestion of Kirit Parikh report, which suggests deregulation of prices.
It will be interesting to see if the government will allow good economics to prevail over the politics of the common man?