The finance ministry will be saddled with an annual expense of at least Rs 38 crore even after the dismantling of administered pricing mechanism (APM) in the oil sector after March 31, 2002.
This is in addition to Rs 7,210 crore that it will have to bear annually on account of 33.33 per cent subsidy on kerosene to be sold through public distribution system (PDS) and 15 per cent subsidy on domestic liquefied petroleum gas (LPG) which would continue even after the dismantling of APM.
The petroleum ministry has informed the finance ministry that post-APM, it will have to bear the expenses (Rs 10 crore every year) of the anti-adulteration cell. Moreover, the finance ministry has to pick the tab to operating regulatory mechanism after the APM is dismantled. It will cost the exchequer Rs 28 crore every year.
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The petroleum ministry has made it clear to the finance ministry that it will have to meet both these expenses from the general budget. Added to this is the expenses that will have to incurred on running the Oil Coordination Committee in a truncated form for a year or so after the dismantling of APM for settling the claims of oil companies up to March 31, 2002.
This goes against the recommendations of the high-power working group, set up by the petroleum ministry itself under the chairmanship of additional secretary N Narad, which had said that the regulator should be funded either through Oil Industry Develop-ment Board or the petroleum ministry