In Tray

The reform of the hydrocarbon sector has two components. First, there is deregulation, which involves the dismantling of the APM, which essentially means freeing the pricing of petroproducts. Also, indigenous crude will become market-determined from April 1 and cross-subsidisation implied in the Oil Pool Account will end. There is a massive restructuring of the sector involving divestment of oil PSUs. The deregulation programme will hopefully benefit the consumer and rationalise the sector. It will align prices to international rates while the restructuring programme will introduce competition.

The finance minister's announcements on the new fiscal regime for the oil sector have reduced the prices of petrol and diesel. The subsidies on domestic lpg and pds kerosene have been determined to ensure that subsidies are kept within reasonable limits and they are fixed and certain. The unhappiness with increase in LPG prices is understandable, but as against a price per cylinder of Rs 223 in Delhi, it costs Rs 285 in Pakistan, Sri Lanka Rs 300 and Nepal Rs 347! The consumer must understand that as we have increased the price of domestic LPG, we have also decreased the price of petrol.