Consultative Committee for continuation of APM beyond 2002

However, when contacted by The Indian Express, Mr Ram Naik, Minister of Petroleum and Natural Gas said that the government would stick to its earlier schedule of phasing out APM by 2002. "At present, there is no consideration of revising the schedule", Naik added.

The consultative committee, which met some time ago, had discussed the APM issue in details. According to sources, most of the members in the consultative committee were of the opinion that the APM should continue beyond the time frame of 2002 to give protection to the consumers. "With the recent international trend of upsurge in the crude oil prices, petro products would be in for a price rise in the future. In such a scenario if the APM dismantling continues according to the present schedule, the people would suffer", sources added.

The system of APM of petroleum products came into existence consequent to the acceptance of the recommendations of the Oil Prices Committee (OPC), 1976. Under APM, a fixed level of profitability to the Indian oil companies are ensured subject to their achieving laid down performance level. APM is operated through the Oil Pool Account which is maintained by the Oil Coordination Committee.

In June 1996, pursuant to the decision of the Committee of Secretaries, an inter-ministerial Group Expert Technical Group (ETG) was set up. Based on the Second report of the ETG, the government decided to start dismantling of the APM in a phased manner starting from April 1, 1998 to April 2002.

The customs duty structure on the petro products are also expected to go down substantially after dismantling of APM. However, the excise duty on aviation turbine fuel has been proposed at 40 per cent in the post APM regime as compared to 16 per cent at present.

Reacting on the recent international oil price rise, Naik added that the issue of any rise in the price hike would be discussed only after the OPEC meet. The OPEC meet is scheduled for September 10.