Moily awaits report from OMCs on move to cut subsidies

Oil Ministry in constant discussions with Fin Min on fuel pricing post subsidy cut

Ministry of Petroleum and Natural Gas has asked oil marketing companies (OMCs) to submit a report on the Finance Ministry’s proposed move to cut subsidies by changing fuel pricing norm.

Based on the OMCs report, the matter will be taken up with the finance minister for a possible decision, M Veerappa Moily, minister for petroleum and natural gas said.

“Earlier, C Rangarajan and Vijay Kelkar committees had gone into the matter and had submitted a report, but for now it needs to be reconsidered. I have discussed this issue with OMCs and asked them to give a detailed report. Once they submit a report, I will discuss the matter with P Chidambaram and take a possible decision on the move to cut subsidies,” he told reporters after laying foundation stone for construction of hitech Central Library at Chikkaballapur, about 55 kilometers from here.

Moily said his ministry is having constant discussions with the Finance Minister on fuel pricing post subsidy cut. He said the Finance Minister wants export parity price to be fixed and it needs to be worked out.

Commenting on the demand of Indian Sugar Mills Association (ISMA) to advise OMCs to finalise ethanol tenders at the earliest so that the factories could begin supplies, Moily said the tendering process has been expedited because there is a mandatory provision that high% of ethanol will have to be mixed with the oil.

“They have already called for tenders and once the tenders come, OMCs will fianlise,” he added.

Replying to another query, Moily said there is no policy change for bulk buyers of diesel at market prices. “We have relaxed it only for fishermen, but not others,” he said.

On long-drawn legal battle between Comptroller and Auditor General (CAG) and largest private gas explorer Reliance Industries, Moily said his ministry would sort it out with the company. “It is a question of auditing and it will have to be responded to and we are not escaping from that. That needs to be done, but entire petroleum project should not be held up because of one small issue,” he said.