Home » National » UPA oil policies benefited Essar, RIL, says CAG UPA oil policies benefited Essar, RIL, says CAG New Delhi, July 18, 2014, DHNS: A file photo of Essar Oil companys Vadinar oil terminal, part of the sprawling oil refinery complex in Gujarat states Jamnagar district. AP Criticising the previous UPA government’s fuel pricing policy that benefited private companies Essar Oil and Reliance Industries to the tune of Rs 667 crore in a year, the Comptroller and Auditor General (CAG) of India called for a pricing mechanism that does not benefit standalone refiners. “Private refiners export balance petroleum products they produce at prices comparable to Export Parity Pricing/free-on-board (FOB), which are lower than Trade Parity Pricing/import parity price (IPP). Procurement at TPP/IPP affords an undue benefit to private refiners (RIL and Essar Oil), which was estimated at Rs 667 crore on diesel in only one year, 2011-12,” the latest CAG report, tabled in Parliament on Thursday, said. The observation was made in the audit report titled “Pricing Mechanism Of Major Petroleum Products In Central Public Sector Oil Marketing Companies”. The audit was carried out for the period 2007-12. The state-owned OMCs purchase petroleum products from standalone and private refineries to fill the gap between production and domestic requirement. The public sector companies pay the private refineries import-linked prices for fuels. Private refiners, however, export their balance products at prices comparable to EPP, which are lower than the import-linked price. “Audit, thus, is of the opinion that there is scope for negotiation with the private refiners to rationalise the contracted sale price which would benefit OMCs,” the report said. The auditor criticised the delay in compensating public sector oil companies for subsidised fuel sale.
Posted on: Sat, 19 Jul 2014 10:10:12 +0000
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