Plan panel suggests linking of petrol and diesel prices to global market

The Planning Commission has sought linking of petrol and diesel prices to the global market and also suggested raising prices of natural gas by public sector companies.

"Natural gas prices of PSUs are very low and need revision,'' the commission said in a presentation on `Integrated Energy Policy' ahead of a meeting chaired by prime minister Manmohan Singh.

The commission also suggested better targeting of subsidies on kerosene and LPG in order that the benefit goes to those below poverty line.

The pricing of LPG and kerosene are "greatly misaligned and imply a very large subsidy. This is leading to huge uneconomic use and unintended benefits to certain classes of consumers and widespread adulteration of petrol and diesel,'' the presentation said.

The commission also called for a stable oil price regime, as it would encourage private oil companies to develop retail network for sale of petrol and diesel.

Addressing the meeting, prime minister Manmohan Singh, who is also the chairman of the planning commission, said:
"Rational energy policies are also critical for rational responses to the threat of climate change. This is a new compulsion and we need to assess whether we are on track in critical aspects of our energy policy. In our situation each energy sub-sector is the domain of a different Ministry. This has often meant a non-symmetric policy stance - the principles being adopted to determine policy in one sector are not the same as in another," he pointed out.