MUMBAI, March 31: The public sector oil companies have reduced the prices of five petro-products that will be decontrolled from Wednesday. Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation have announced that naphtha, furnace oil (FO), low sulphur heavy stock (LSHS), bitumen and light diesel oil (LDO) will be considerably cheaper following deregulation.Naphtha will be priced at Rs 7,072 per tonne, down by Rs 372 from the previous Rs 7,444 per tonne under the administrative pricing mechanism. FO will also be cheaper by around Rs 250 from the previous Rs 5,053 per kilolitre to Rs 4,800 per kilolitre. In the case of LSHS, the present price is Rs 5,070 per tonne, down by Rs 380 from Rs 5,452 under APM. LDO's new price will be Rs 7,200 per tonne, a reduction of Rs 64 from the old price.
Different grades of bitumen will also be cheaper in the decontrolled scenario and the price reduction has varied from Rs 200 to Rs 450 per tonne (see table). The BPCL press release statesthat retail selling prices of liqueifed petroleum prices (LPG) for non-domestic consumers sold in 19 kg and 47.5 kg cylinders have been reduced by about two per cent over the current prices. The price for bulk LPG consumers has been reduced by two per cent.
The new prices will be almost the same for all the oil PSUs though the press releases indicate marginal differences of Rs 2-Rs 5 per selling unit (tonne or kilolitre) for the different commodities. The IOC statement reads thus: "The prices of deregulated petroleum products are expected to be market-driven and suitably adjusted in future to reflect the prevailing market conditions - domestic as well as international."
The suggestions on oil reforms are part of the report submitted by the expert technical group headed by Nirmal Singh, joint secretary in the ministry of petroleum and natural gas. The group has suggested a five-year phased out reforms period at the end of which the oil sector will be completelyy deregulated. The first phase, which kicksoff on Wednesday, will see some products continuing under price control. These are motor spirit (MS), high speed diesel (HSD), kerosene, aviation turbine fuel (ATF) and LPG.In a separate communique, the petroleum ministry has stated that the oil PSUs can change prices of the decontrolled products from time to time.
"However, it would be necessary for the oil companies, individually or collectively, to inform the Oil Coordination Committee/petroleum ministry of such revisions at least one week in advance of the proposed date of revision."
The statement adds: "Oil companies may ensure that there are no sudden jerks in price variation and their customers are also suitably educated and informed about the need for change and direction of proposed changes."
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
