NEW DELHI, SEPT 18: The Government is not likely to hike prices of petroleum products like kerosene and LPG for the present despite suggestions by the expert committee on phased dismantling of the administered pricing mechanism (APM) cleared by the United Front government, Petroleum and Natural Gas Minister V K Ramamurthy said today. Speaking at the economic editors' conference here today, the Minister said that the Government had not taken any decision to remove the existing subsidies on these products.The cabinet is yet to decide on the issue, he said adding "every decision cannot be on the dotted line." The UF government had last year approved the recommendations of the Nirmal Singh Committee which had worked out a five year time table for phased dismantling of the APM between 1998 to 2002. The Committee had suggested sweeping changes to deregulate the hydrocarbon sector with a view to making it more internationally competitive.The actual dismantling of the APM started on April 1 this year with pricecontrols on petro products except diesel, petrol, kerosene, LPG and aviation turbine fuel being withdrawn.The need to dismantle the APM was felt because of the massive burden of subsidy on the government owing to the two petroleum products LPG and kerosene to the tune of Rs 7,000 crores every year. Every LPG cylinder is subsidised to the extent of Rs 72 per cylinder and kerosene to Rs 4.50 per litre.The Nirmal Singh Committee, constituted by the Petroleum Ministry under the chairmanship of the joint secretary, had suggested that the subsidy on LPG be reduced to fifteen per cent of import parity and that on kerosene to 33.33 per cent of the import parity in the final year of the APM dismantlement in 2002.When full deregulation of the industry comes into force thereafter, the subsidies on LPG and kerosene would be transferred to the fiscal budget of the Government.On achieving self sufficiency in the oil sector, the Minister said it was not possible to do away completely with oil imports but ourefforts would be reduce the dependence on them.On future strategies, he said the Government was focussing on acquisition of oil and gas producing properties in the middle East and central Asia, Kazhakastan and USA to augment indigenous oil production.Import of liquified natural gas (LNG) from the middle East was also being considered, he said.
