Panel on oil tanker CPF issue

NEW DELHI, January 27: The Ministries of Petroleum and Surface Transport have set-up a two member committee to sort out their dispute over the decision to abolish the cost-plus formula (CPF) for oil tankers employed by the Oil Coordination Committee (OCC). The decision to scrap the method of pegging freight for tankers on CPF from April 1, 1998, was taken by the Union Cabinet after it approved phase out of the administered price mechanism for petroleum and petroleum products two months ago. MoST had opposed the move, apprehending a severe setback to the Shipping Corporation of India (SCI).

Transport Ministry sources said the two member committee — comprising the SCI chairman and managing director P.K. Srivastava and the executive director (OCC) Subir Raha — will work out a mutually acceptable formula to replace CPF. The panel has been asked to submit its report within a month. The decision was taken at a meeting between Narain and the Union Petroleum Secretary Probir Sengupta here today. The meeting was also attended by senior officials of OCC and SCI.