31 October, 2020

'The Current Policy Is Even More Inflationary'

The Chairman of the committee on Petroleum Decontrol spoke to Outlook about the fuel price hike announced by the government

'The Current Policy Is Even More Inflationary'

The government has accepted the recommendations of your committee but not in totality. Is this enough?
The principle of all our recommendations have been accepted. That is important as decontrol of this sector is crucial for India’s energy efficiency. But I am disappointed with what has been done with diesel. I would have been much happier if the government brought down excise and decontrolled diesel as well. To that extent, I am 75 per cent happy but 25 per cent unhappy with what has happened. 

The government has left the option open to intervene in fuel pricing if crude prices shoot up but has not defined a cut off mark.
It is a matter of concern that the government says that it will intervene on volatility and high prices of crude. It would have been nice if the government had stated specifically that it would intervene only if the global prices hit a point like $ 120 a barrel. This puts an uncertainty in every oil marketing company’s mind and the private companies would think twice before moving forward in this field.



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