Private oil cos seek bonds on a par with public sector

Private oil cos seek bonds on a par with public sector
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First Published: Fri, Mar 14 2008. 12 12 AM IST

Pricing issue: Petroleum and natural gas secretary M.S. Srinivasan.
Pricing issue: Petroleum and natural gas secretary M.S. Srinivasan.
Updated: Fri, Mar 14 2008. 12 12 AM IST
New Delhi: Private sector oil marketing companies (OMCs) such as Reliance Industries Ltd (RIL), Essar Oil Ltd and Shell India are lobbying the oil and gas sector regulator, Petroleum and Natural Gas Regulatory Board (PNGRB), for equal treatment with public sector oil marketing companies, including access to the oil bonds issued by the government to underwrite the subsidy cost of selling petroleum products at a concessional price.
Pricing issue: Petroleum and natural gas secretary M.S. Srinivasan.
The private sector’s demands comes days after petroleum and natural gas secretary M.S. Srinivasan’s outburst, reported by Mint on 16 February, against the government’s populist policies on fuel pricing, which he argued posed a handicap for the oil sector.
“The companies have recently presented this joint demand to us and a bench of PNGRB is considering it,” B.S. Negi, member, PNGRB, said.
While a Essar Oil spokesperson and Shell spokesperson declined comment, email questions to RIL went unanswered.
The companies have been demanding oil bonds on par with the government-owned OMCs such as Indian Oil Corp. Ltd (IOC), Hindustan Petroleum Corp. Ltd (HPCL) and Bharat Petroleum Corp. Ltd (BPCL) because even though the so-called administered pricing mechanism was to be dismantled effective 1 April 2002, the government still continues to control product prices. Public sector units operate almost 95% of the retail outlets across the country.
The Union government artificially controls the prices of petroleum products, such as petrol, diesel, kerosene and liquefied petroleum gas, by subsidizing the public sector OMCs that then charge less from consumers. This subsidy, however, is not available to private OMCs.
Private sector OMCs such as Essar Oil and Reliance Industries maintain that they have been forced to shut several retail outlets due to the price mismatch at the government OMCs’ pumps and their pumps.
-Utpal Bhaskar
Cabinet gives nod for national mineral policy
New Delhi: The Union Cabinet on Thursday gave its in principle approval to the National Mineral Policy(NMP), 2008, recommended by the high level committee together with the modification on the basis of consultation with the state governments.
The cabinet also gave its nod for the creation of an independent dispute resolution mechanism, the Mining Administrative Appellate Tribunal which will be ready to function within six months.. With the NMP in place, the mining sector is likely to to attract foreign direct investment to the tune of $250 million over the next five years according to experts. The government will introduce the amendments to the Mines & Mineral (Development and Regulation )Act, 1957, in the budget session.
The Cabinet also approved enlarging the scope of Public Enterprises Selection Board, which makes appointments to top public sector posts by allowing it to consider “non-internal candidates” from the private sector and state-level public sector firms for these posts.
It also approved an increase in the authorized capital of Food Corporation of India from Rs2,500 crore to Rs3,500 crore.
-Staff Writer
Rahul moots changes in farm loan package
New Delhi: In an indication of possible changes in the Rs60,000 crore debt relief package announced in Budget 2008, Rahul Gandhi, a Lok Sabha member of the Congress party, suggested on Thursday that the land ceiling as well as the cut-off date applicable for the proposed relief should be reviewed.
Participating in a discussion on the Budget in the Lok Sabha, Gandhi, who is being groomed as a future prime ministerial candidate of the Congress party, said the ceiling of 2ha did not account for land productivity and excluded farmers in poorly irrigated areas, such as Vidarbha. “Perhaps, sir, we should consider making the land ceiling variable based upon land productivity,” he said.
Gandhi’s suggestion came ahead of finance minister P. Chidambaram’s reply on the discussion, in which he is expected to provide further details of funding the debt relief. Earlier, Gandhi had made a well-publicized demand for extending the National Rural Employment Guarantee Scheme to all rural districts across the country, just before the government announced the extension of the scheme.
Claiming he had consulted several experts, Gandhi said a single cut-off date of 31 March 2007 “unfairly penalizes” certain farmers due to the different cropping cycles. “It would greatly help if localized cut-off dates were considered so that every deserving farmer benefits from the waiver,” he said.
Both the Left parties, supporting the government from outside, and the principal Opposition, Bharatiya Janata Party, have been criticizing the government’s package on these conditions imposed on the farmers. However, Gandhi did not mention the vast majority of debt-ridden farmers who had taken loans from private moneylenders and would not benefit from the package.
-Ashish Sharma
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First Published: Fri, Mar 14 2008. 12 12 AM IST
More Topics: Oil Companies | Public Sector | PNGRB | RIL | Cabinet |