Petroleum Min mulling dual pricing policy for diesel

The Petroleum Ministry is looking into a dual pricing policy for diesel that would entail charging bulk users a higher price for the subsidised fuel, a senior official said today.      

"It (dual pricing policy) is under consideration right now and bulk users would be charged more if implemented," Petroleum Secretary R S Pandey told reporters here.      

Oil PSUs had proposed to the Petroleum Ministry that diesel for industries and big cars be sold at Rs 57 per litre instead of the current price of Rs 34.80 a litre.     

Pandey refused to comment on when the matter would be taken to the Cabinet for approval. If the policy is implemented, bulk/industrial users would be charged Rs 22.20 more, he added.     

 

Last month, Petroleum Minister Murli Deora had a brainstorming meeting with chiefs of oil firms where he was informed that diesel demand in April-July had gown up by 18 per cent, with bulk of the growth coming from industrial users like power plants.      

The unprecedented growth in demand has seen domestic output fall short of the requirement and a total of 4.14 million tons of diesel may have to be imported in 2008-09. Of this, 1.267 million tons has been imported in April-July.     

Oil companies are projected to lose about Rs 1,00,000 crore on diesel sales this year as the subsidised fuel is being increasingly used in industries for power generation.      

The power sector had seen a whopping 152 per cent rise in demand in the first quarter to 53,000 tons, while fisheries and marine sector had seen a near-40 per cent growth, sources said.