Oil subsidies to go by 2007

The government would phase out subsidies on cooking gas and kerosene by 2007, Petroleum Secretary SC Tripathi said today.

"It is the government's stated intention to remove subsidies by 2007 and we are working towards that," he said at the third Petro India conference.

Tripathi said the subsidies were to be eliminated from the next fiscal year, but it was decided to be extended by two years. Subsidies on LPG and kerosene are estimated to cost the government Rs 3,500 crore in 2004-05.

The Rs 22.58 per cylinder subsidy on LPG announced in the 2004-05 Budget is likely to be enhanced to about Rs 40 and that on kerosene to Rs 1.10 per litre from Rs 0.81 per litre owing to the increase in international price of crude oil.

He said a Bill for setting up an independent regulator for the oil and the gas sector has been referred to a group of ministers and would therefore not be introduced in Parliament during the current session.

Tripathi said a Bill for setting up of an independent regulator for the oil sector would not be presented during the current session of Parliament as it has been referred to a group of ministers.