)
Planning Commission Deputy Chairman Montek Singh Ahluwalia today said India might not be able to achieve the targeted eight per cent gross domestic product (GDP) growth rate annually, if domestic fuel prices were not aligned with global benchmarks.
“The alignment of domestic energy prices with international prices is the single most important thing that will determine our ability to grow at eight per cent. If we take a policy decision that we are not going to align prices, forget about eight per cent growth,” Ahluwalia said at a press conference. He said any decision to bring import parity in energy prices “is very difficult politically and I do not believe there is enough intellectual support in its favour”.
He expressed concern at the fact that global prices of major fuels, including coal and diesel, are way above domestic rates. “In fact, international price of gas is in multiples of domestic price. So, this is not just an issue of gas pricing. The government has already started narrowing the price gap,” he said.
This was not the first time Ahluwalia has voiced his views in favour of the price move. The 12th Plan document has delved in detail on how a misalignment in global and domestic rates may cause problems for the economy. However, the recommendation, which hints at further fuel price hikes, comes at a time when much of the “misalignment” in global and domestic fuel prices has already been bridged.
The switchover to gross calorific value-based grading system increased coal prices in January 2012. In the petroleum sector, the administered pricing mechanism was dismantled in 2002 followed by complete deregulation of petrol prices in 2010. The government allowed gradual price rise for reducing under-recoveries in diesel, too, in January this year.
<b>Suspicions on Clean Energy Ministerial meet</b>
Ahluwalia today sought to allay suspicions on the purpose behind the two-day meeting of energy ministers of 23 nations starting here on April 17, popularly called the Clean Energy Ministerial (CEM) 2013.
On whether the CEM would undermine the ongoing discussions in the United Nations Framework Convention on Climate Change (UNFCCC), he said, “The proposition is wrong, because the CEM is not a negotiation forum. It would be exceptionally foolish to take that position.”
He further clarified that India was not going to take any obligation on cutting emissions on any forum which was not a globally acknowledged platform for negotiations. The UNFCCC was designed with two key objectives – seeking binding commitments on emissions from nations and funds to be channelised for clean energy initiatives. Ahluwalia said the CEM has none of the two objectives.
Planning commission member (Energy) B K Chaturvedi, who was also addressing the media, said that the areas of discussion and information exchange likely to come up during the CEM include technologies for battery-operated motor vehicles, smart power transmissioin grids, solar photo-voltaic (PV) panels, wind energy generation and energy efficient appliances. “Overall, discussion will take place around 12 verticals. China, for instance, has developed technologies in electric vehicles which we can benefit from,” he said, adding that the CEM will not discuss issues of duties and taxes and other bilateral trade-related issues.
The CEM has its genesis in a December 2009 announcement by US energy secretary Steven Chu at the UNFCCC conference that he would host the first ministerial meet to facilitate dialogue between the world’s major economies and a few smaller countries on the common agenda of technology exchange in the clean energy space. The first CEM was held in Washington DC, followed by Abu Dhabi and London. India is hosting the meet for the first time.
The 23 participating nations in the CEM include Australia, Brazil, Canada, China, US, UK, France and Germany. These nations account for 80 per cent of the global greenhouse gas emissions and 90 per cent of global clean energy investment. Responding to a question on what came out of the last three ministerial meets, Chaturvedi said no stock-taking has been done of the progress of initiatives taken the last three meets.
