(a) whether the Inter-Ministerial Committee set up under the chairmanship of former Governor of Reserve Bank of India (RBI), Dr. C. Rangarajan to formulate a long term pricing policy for petroleum products has submitted its report to the Government;
(b) if so, the details of the recommendations made by the Committee;
(c) the follow-up action taken by the Government; and
(d) if not, the time by which the committee is likely to submit its report ?
MINISTER OF STATE IN THE MINISTRY OF PETROLEUM AND NATURAL GAS (SHRI DINSHA PATEL)
(a)&(b): Yes, Sir. The Rangarajan Committee report on pricing and taxation of petroleum products was submitted to the Government on 17.2.2006.
The main recommendations of the Committee are as follows :-
1. On pricing of petrol and diesel:
(i) Shift to a trade parity pricing formula for determining refinery gate as well as retail prices;
(ii) Government to keep at arms length from price determination and to allow flexibility to oil companies to fix the retail price under the proposed formula; and
(iii) Reduce effective protection by lowering the customs duty on petrol and diesel to 7.5%.
2. On pricing of domestic LPG and PDS kerosene:
(i) Restrict subsidized kerosene to BPL families only;
(ii) Raise the price of domestic LPG by Rs.75/cylinder;
(iii) Discontinue the practice of asking upstream companies to provide upstream assistance, but instead collect their contribution by raising the OIDB cess from the present level of Rs.1,800/MT to Rs.4,800/MT; and
(iv) Government meeting the balance cost of subsidy from the budget.
3. On restructuring excise duties:
Shift from the present mix of specific and ad-valorem to a pure specific levy and calibrating the levies at Rs.5.00/litre of diesel and Rs.14.75/litre of petrol.
The Committee has recommended that each of the first two sets of recommendations should be implemented as integrated packages.
(c)&(d): The recommendations of the Committee are under examination of the Government.