Govt not keen on locational pricing of petro products
New Delhi: Indian Petroleum Minister Ram Naik is not interested in setting up a differential pricing scheme to allow marketing companies recover higher product prices at coastal locations and lower prices at inland locations, official sources were quoted as saying. The proposal, put up by the petroleum bureaucrats, means petrol and diesel will be cheaper in coastal areas like Mumbai and expensive in the hinterland like Delhi. The current disparity in prices across India is solely on account of the state-specific taxes and duties with the oil companies equalising prices across the country.

Naik said: "I have not studied the file [on the subject] so far, and hence it is premature to comment on the issue." Termed import parity pricing, the scheme seeks to compensate the marketing companies the cost involved in bringing the products from the coast into the inland regions. The proposal was triggered by the spate of recent imports of diesel by Essar Oil. This has eroded the market share of the public sector oil marketing companies HPCL, BPCL, and IOC in the coastal regions since the importers are able to sell to bulk consumers at lower prices compared to the public sector companies.
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