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Will Govt accept Chaturvedi’s Oil Recommendations ?

August 12, 2008

The Chaturvedi committee has recommended a transparent mechanism for dealing with losses of state-owned oil marketing companies (OMCs) via monthly review of auto fuel prices to bring them to par with export parity prices in phases and funding LPG/Kerosene subsidies through a special oil tax.

The proposals are most positive for ONGC, if ad-hoc subsidies are indeed scrapped in favour of the transparent “special oil tax”. No tax on pure refiners is positive for RIL, while Cairn is not impacted by the proposals.

It has been more than 14 years since India has been forming committees to review Energy Prices and needs but the successive Governments have lacked the will to implement any recommendation. Here is the laughing stock of committees appointed by Various Indian Governments to review Oil & Energy situation in the past 14 years.

Sundararajan Committee for Pricing reforms in 1994 (Chaired by Mr. U. Sundararajan)
Restructuring Committee in 1996 (Chaired by Mr. Vijay Kelkar)
Gas pricing committee in 1997 (Chaired by Mr. T. L Sankar)
Expert Technical Group or Nirmal Singh Committee in 1997 on Petroleum product pricing
Nitish Sengupta Committee on Oil Infrastructure in 1998/99
Synergy for Energy Committee in 2005 (Chaired by V. Krishnamurthy)
Committee on Petroleum product pricing in 2005/06 (Chaired by Mr. Rangarajan)

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