Murli Deora to meet FM on budgetary proposals

New Delhi, Jan 21: Ahead of the Union Budget, Petroleum Minister Murli Deora will meet Finance Minister P Chidambaram this week to seek tax rationalisation and duty exemption in petroleum products while urging for an infrastructure status to gas and oil pipelines.

Mr Deora would also seek an Income Tax holiday of 7-10 years in Oil Exploration and Production sectors.

The Petroleum Minister will also look for the meeting scheduled this week, a reduction in tax petroleum products in the wake of drop in global crude oil prices which is hovering at 50 to 51 dollars a barrel.

The price of petrol was cut last by Rs 2 a litre and diesel by Re 1 on November 29, following the softening of international crude prices to below 60 dollars a barrel.

On Friday, the Petroleum Minister had ruled out any reduction, any immediate cut in petrol and diesel prices.

He said the Government would wait for the international crude prices to stabilise.

Mr Deora said the Government was closely watching the downward trend, but a decision could not be taken on the basis of crude prices falling below 50 dollars for just for a day or two.

The Government would take a decision about ''revising the possibility of any cut'' at an appropriate time, Mr Deora said.

However, he said due to the limited storage facilities, buffer stocks could not be increased immediately to take advantage of the lower prices, adding that the Government planned to increase the stocks to around one million tonnes of crude, but this would take some time.

The government has also decided to continue subsidy on kitchen fuels till March 31, 2010. The oil ministry has set the ball rolling to seek Cabinet approval in this regard and is suggesting changes for the entire subsidy to be borne through the Budget.

''As per strict instructions of Congress President Sonia Gandhi, the subsidies on kerosene and cooking gas will not be withdrawn.

The UPA Chief has asked the petroleum ministry to continue supplying the fuels, mostly used by the poor, at the same price,'' Mr Deora had said.

The subsidy on PDS kerosene and domestic LPG was to be phased out by March 31, 2005 for dismantling of the administered pricing mechanism (APM) for petroleum products. This deadline was extended by two years to March 31, 2007.

The government is incurring losses amounting to Rs 14,000 crore due to the subsidies.

Petroleum Secretary M S Srinivasan said state-run oil companies are incurring a loss of Rs 0.22 per litre on petrol and Rs 1.42 a litre on diesel. Kerosene is being sold at a loss of Rs 13-14 per litre and LPG at a loss of Rs 50 per cylinder.

UNI

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