India will go ahead with Iran pipeline project

PM to call meeting on oil pricing soon: Deora.

Petroleum Minister Murli Deora on Wednesday reiterated India's commitment towards the $ 7-billion Iran-Pakistan-India gas pipeline. He said he would further dialogue on the project when Pakistan's oil minister visits India next week.

"We are committed to making the project a reality. We need the gas from Iran and will continue to pursue it," he said here. The project is proposed to transport 90 million standard cubic meters of gas per day from Iran's south Pars field to India from 2009-10.

On the proposed $22-billion deal with Iran to import 5 million tonnes of LNG a year for 25 years beginning 2009-10, he said, "We are negotiating the terms. I hope the deal will come through."

He also said Prime Minister Manmohan Singh would soon call him to a meeting along with Finance Minister P Chidambaram to discuss the pricing of petrol, diesel, LPG and kerosene.

"I am not in favour of raising LPG and kerosene prices as these are used by the poor and vulnerable sections of the society. We need to see how through duty adjustments, raising government subsidy and the issuance of oil bonds the financial health of oil PSUs can be restored," he added.

Deora said the government would issue oil bonds worth Rs 5750 crore "" in two tranches of Rs 2,000 crore Rs 1,750 crore "" to oil firms to partly compensate them for losses due to state control on retail prices of petroleum products.

The rate of interest for the bonds being 7 per cent, the tranches would be issued at a gap of 3, 6, and 9 years, officials added.

Meanwhile, head of a committe to look into petro pricing, C Rangarajan, met Deora today and said the report on oil pricing will be submitted next Tuesday.

He said the committee would look at various aspects including steps to improve the profitability of oil PSUs, increase in retail prices of petroleum products and pricing of kerosene and petroleum gas.

He said a stand was required on LPG and kerosene prices and if dual pricing had difficulties, then the option of using cash vouchers and debit cards should be explored.