IOC seeks pricing linked to imports.

NEW DELHI: State-run Indian Oil ( IOC) has questioned the finance ministry's move to link cooking and auto fuel prices to what they would fetch if exported while pointing out the recent decision to link domestic gas prices to the imported cost.

During a presentation before the Kirit Parikh committee earlier this week, IndianOil said in a host of sectors such as petrochemicals and chemicals, fertilizer, steel and even crude domestic prices are linked to the international price, sources present in the meeting told TOI.

The country's largest oil marketing firm is also learnt to have pointed out that export parity pricing, being pushed by the finance ministry, will also lower the protection level at a time when petrochemicals and others have been given more benefits. IndianOil director (finance) P K Goyal did not respond to several attempts to reach him on the phone.

Oil retailers and the petroleum ministry have tried to stop the finance ministry from imposing its formula for subsidy sharing, arguing that the firms stand to lose out on compensation and it will also impact their investment and expansion plans. As reported first byTOI on May 15, the finance ministry had decided to shift to the new subsidy regime from the March quarter but petroleum minister Veerappa Moily approached Prime Minister Manmohan Singh to get North Block to defer its plans, subject to a review by the Kirit Parikh panel. The committee met for the first time on Monday.

At the meeting, Singh had also asked the finance ministry to pay Rs 45,000 crore as its share of subsidy for the last quarter. The ministry has, however, cleared only a part of the additional burden as it decided to stagger the payment into six tranches. While three have been paid, others are delayed as the centre got into overdraft mode last week. Officials, however, said that with the government back to having a positive cash balance, the remaining installments would be paid.

Source : timesofindia.indiatimes.com