The baton for resolving petroleum subsidy woes has been handed — for the third time since the UPA came to power in 2004 — to a five-member committee headed by Dr Kirit S Parikh, the author of India’s Integrated Energy Policy that aims to make energy markets more competitive with market-determined pricing.

Parikh, a former member of the Planning Commission in charge of energy, water and perspective planning, also favours a cost-plus pricing of natural gas — a mechanism that petroleum minister Murli Deora recently announced he planned to implement until gas shortage eases.

Sources said Deora on Wednesday approved Parikh’s name as chairman of the expert group “to advise on a viable and sustainable system of pricing petroleum products” as announced by finance minister Pranab Mukherjee while presenting Budget 2009-10 on July 6.

The committee’s other members are: Indian Council for Research on International Economic Relations chairperson Isher Judge Ahluwalia, National Council of Applied Economic Research director-general Suman K Bery, and the secretaries of finance and petroleum.

The Group of Experts would have to work within the Congress manifesto of “providing petroleum products to the people at reasonable prices along with ensuring that the state-run oil marketing companies (OMCs) run profitably and efficiently,” said sources.

Last fiscal, the government took on the burden of the OMCs’ under-recoveries and issued oil bonds of Rs71,292 crore while the upstream state-run companies contributed Rs 32,000 crore in price discounts.

The committee is the third panel to be formed to address low consumer prices in the face of rising global oil prices that is causing revenue loss to Indian Oil, Bharat Petroleum and Hindustan Petroleum on sales of petrol, diesel, domestic LPG and kerosene at below cost price.

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