Oil and gas: Changing paradigm - Business Standard

The Kirit Parikh Committee report has outlined recommendations on aligning petroleum product prices with international prices and suggested a formula for sharing the subsidy burden with upstream oil companies, given that fiscal prudence is the need of the hour.

Oil Tanks India manufacturing facility.

The committee hopes to cap the government’s share of the subsidy burden by reducing total subsidy and consequently under-recoveries. It has fixed a crude price-linked formula for the share of burden to be shouldered by upstream companies. Key measures include eliminating all petrol and diesel subsidies by deregulating prices at the refinery and retail level. Secondly, reducing public distribution system (PDS) kerosene allocation across India by 20 per cent at least and raising PDS kerosene prices by Rs 6 per litre. Finally, the committee recommends increasing LPG prices by Rs 100 per cylinder.

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