>FUEL PRICE DECONTROL (ANAGRAM)

■ Murli Deora is in charge of petroleum ministry for the second term under the leadership of the new UPA government without the Left is actively considering deregulation of auto fuel prices. This if approved by the cabinet would be shot in the arm for the oil marketing companies and provide relief to the government reeling under huge fiscal deficit of 6%.

■ The subsidy burden for the government to keep the oil prices under check is around 1.3% of GDP. Deregulation of the auto fuel prices till the time crude is below a threshold level would help to reduce the subsidy burden for the government and thus impacting the fiscal deficit positively.

■ In April 2002, the APM system was discontinued and a degree of autonomy extended to the oil marketing companies to set prices based on internatinally quoted prices of petroleum products. Between 2002 and 2004, the world prices of crude petroleum had risen by 26% to 32% and prices of HSD and MS by between 19% and 41%. So the government again started implementing APM.

■ The government has opened discussions on possibility of deregulation of auto fuel prices. This government had appointed Chaturvedi Committee for implementing reforms in the oil & gas sector in India.

To see full report: FUEL PRICE DECONTROL