PM to call meeting on fuel pricing

Prime Minister Manmohan Singh is likely to hold discussions on fuel pricing with Finance Minister P Chidambaram and Petroleum Minister Murli Deora next week.

The Rangarajan Committee, appointed by the prime minister, last week submitted its recommendation for a hike in petrol, diesel and LPG prices and a duty cut on fuel transportation.

Speaking on the sidelines of the Fourth Asian Gas Summit, Deora said, "We have to study the implications of the report before taking a decision on implementing it," he said.

Deora said meeting the burgeoning demand for natural gas was a big challenge for India.

"The share of natural gas in India's primary energy mix is likely to increase from the current levels of nine per cent to 20 per cent in 2025, while the demand for gas is expected to double during the same period," Deora said.

Apart from exploration, the petroleum minister said India needed to look at large investments in transport infrastructure. Both private and public sectors have to play an important role in the development of natural gas pipeline infrastructure, he added.

Petroleum Secretary MS Srinivasan said the whole issue of supply shortage revolved around the pricing. "If we get the pricing right demand and supply will automatically stabilise. Hence, it is important that natural gas pricing be resolved before going into other procedural formalities," Srinivasan said.

Stressing the importance of energy security, he added that talks on the Iran pipeline were shaping up.

Pakistan's Adviser to the Prime Minister on Energy Mukhtar Ahmed said pricing was important for the financial viability of any project. He added that Pakistan was seriously considering the pipeline to meet the country's demand for natural gas.

Planning Commission Deputy Chairman Montek Singh Ahluwalia said an integrated approach in terms of an energy policy was required. Agreeing with the suggestion of getting prices right, he also made the case for market-driven pricing for natural gas.

"For instance, in the power sector, which is the majority consumer of natural gas, there are no takers at market prices," Ahluwalia said. The power sector should look at cutting their transmission and distribution losses to pay market prices for the fuel, he added.