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This is an archive article published on December 14, 2000

No move to pass benefits to consumers — Naik

DEC 13: The recent slide in the international crude oil prices has come as a big relief and will help in controlling the oil pool deficit,...

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DEC 13: The recent slide in the international crude oil prices has come as a big relief and will help in controlling the oil pool deficit, estimated to touch Rs 12,000 crore by the end of 2000-01.

Speaking to newsmen on the sidelines of a seminar on `petroleum prices and its impact’ under the patronage of Associated Chambers of Commerce and Industry (Assocham) on Wednesday, Petroleum and Natural Gas Minister Ram Naik, however, ruled out the possibility of immediately passing the benefits of slide in global crude oil prices to the consumers.

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"We welcome the fall in international crude oil prices. However, passing it on to the consumers would only be possible when the prices come down to $22 per barrel level and the oil pool deficit is entirely cleared," Naik said.

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Stating that India had suffered badly due to the high volatility in oil prices, the Minister informed that the oil pool deficit continues to be Rs 13,000 crore, in spite of the price hike in September.

Earlier, speaking at a seminar, Naik said that the administered prices for petrol, diesel, kerosene, LPG and aviation turbine fuel (ATF) would be phased out by April 2002.

The administered price mechanism (APM), he said, would be phased out by gradually doing away with subsidies in the consumer prices of petroleum products and rationalising customs and excise duty structures by 2002.

"From April 2002, a subsidy at the rate of 33.3 per cent of price of PDS kerosene and 15 per cent of LPG for domestic use would remain to be provided through the Budget," Naik said.

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The Petroleum Minister also hinted at the government’s decision to offer 25 new blocks for oil exploration to Indian and international companies early next week.

Naik also disclosed that the government has also finalised a programme for acquisition of foreign acreage by Indian companies like ONGC Videsh to ensure secured supply to the country.

"An MoU in this respect has already been signed for block eight in Iraq and for exploration in Indonesia and Venezuela," he added.

Naik said the Oil Producing and Exporting Countries (OPEC) had announced a mechanism that would entail production increases or cuts depending upon price movement between an upper and lower band of $ 28 to 22 a barrel respectively.

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However, for some reason, this has not been working effectively and there is need for OPEC to intensify efforts to bring down the prices, he added.

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