CCEA approves deregulating diesel prices & new domestic gas pricing policy
Updated: Oct 20, 2014 12:45:08pm
New Delhi, Oct 20 (KNN) Cabinet Committee of Economic Affairs, chaired by the Prime Minister Narendra Modi has approved the new domestic gas pricing policy and deregulating the diesel price formula.
As per the formulation approved by the Cabinet Committee of Economic Affairs (CCEA), upward revision in gas prices will be approximately 75 per cent less as compared to the price arrived at using Rangarajan formula. The periodicity of gas prices determination/notification shall be half yearly, according to a CCEA press release on Saturday.
The price and volume data used for calculation of applicable price shall be the trailing four quarter data with one quarter lag. The first price would be determined on the basis of price prevailing between 1 July 2013 and 30 June 2014. This price would come into effect from 1 November 2014 and would be valid till 31 March 2015.
Thereafter, it would be revised for the period 1 April 2015 to 30 September 2015 on the basis of prices prevalent between 1 January 2014 and 31 December 2014, i.e., with the lag of a quarter and so on. The prices would be announced 15 days in advance of the half year, for which it is applicable.
The Committee also recommended applicability of the modified approach prospectively and to apply it uniformly to all sectors of the economy, along with prevailing gas allocation policy of the Government. Approximately 80 per cent of the additional revenue due to revision in gas price will go to the Government companies. The Government will get additional revenue of approximately Rs 3800 crore per annum on account of higher royalty, higher profit petroleum and higher taxes.
Meanwhile, CCEA also approved the issues relating to the under-recovery on sale of diesel and its present status. Instructions have been issued to make the price of Diesel market determined with effect from midnight of October 18th-19th, 2014. “The prices of Diesel will be market determined at both Retail and Refinery Gate level for all consumers thereafter,” according to an official statement.
Based on an earlier decision of the Cabinet Committee on Political Affairs (CCPA) dated January 17, 2013, instructions were issued to the Public Sector Oil Marketing Companies (OMCs) allowing them to increase the retail selling price of Diesel in the range of 40 paisa to 50 paisa per litre per month (excluding VAT as applicable in different States/Union Territories) till further orders.
Diesel prices will henceforth be market determined. This will facilitate greater competition in the Auto Fuels Retail segment and enhanced efficiency in service delivery of the oil companies. This is expected to benefit consumers due to greater competition among oil companies and more choices. The competition is also expected to foster greater efficiency in oil companies benefitting the consumers. (KNN/SD)
As per the formulation approved by the Cabinet Committee of Economic Affairs (CCEA), upward revision in gas prices will be approximately 75 per cent less as compared to the price arrived at using Rangarajan formula. The periodicity of gas prices determination/notification shall be half yearly, according to a CCEA press release on Saturday.
The price and volume data used for calculation of applicable price shall be the trailing four quarter data with one quarter lag. The first price would be determined on the basis of price prevailing between 1 July 2013 and 30 June 2014. This price would come into effect from 1 November 2014 and would be valid till 31 March 2015.
Thereafter, it would be revised for the period 1 April 2015 to 30 September 2015 on the basis of prices prevalent between 1 January 2014 and 31 December 2014, i.e., with the lag of a quarter and so on. The prices would be announced 15 days in advance of the half year, for which it is applicable.
The Committee also recommended applicability of the modified approach prospectively and to apply it uniformly to all sectors of the economy, along with prevailing gas allocation policy of the Government. Approximately 80 per cent of the additional revenue due to revision in gas price will go to the Government companies. The Government will get additional revenue of approximately Rs 3800 crore per annum on account of higher royalty, higher profit petroleum and higher taxes.
Meanwhile, CCEA also approved the issues relating to the under-recovery on sale of diesel and its present status. Instructions have been issued to make the price of Diesel market determined with effect from midnight of October 18th-19th, 2014. “The prices of Diesel will be market determined at both Retail and Refinery Gate level for all consumers thereafter,” according to an official statement.
Based on an earlier decision of the Cabinet Committee on Political Affairs (CCPA) dated January 17, 2013, instructions were issued to the Public Sector Oil Marketing Companies (OMCs) allowing them to increase the retail selling price of Diesel in the range of 40 paisa to 50 paisa per litre per month (excluding VAT as applicable in different States/Union Territories) till further orders.
Diesel prices will henceforth be market determined. This will facilitate greater competition in the Auto Fuels Retail segment and enhanced efficiency in service delivery of the oil companies. This is expected to benefit consumers due to greater competition among oil companies and more choices. The competition is also expected to foster greater efficiency in oil companies benefitting the consumers. (KNN/SD)
Loading...
