The Parliamentary Standing Committee on Finance has asked the Government to furnish details on under-recoveries incurred by the public sector oil marketing companies in three weeks.
The committee, which started discussions on the burgeoning under-recoveries of oil companies and the mechanism to fix prices for petroleum products and natural gas, wanted the Government to explain the rationale behind deciding that the under recovery burden for the Twelfth Plan will be more than Rs 8 lakh crore.
The Secretary of the Planning Commission, the Finance secretary and the Petroleum Secretary appeared before the panel, headed by BJP MP Yashwant Sinha, here on Friday. “We have asked the Government and Planning Commission to submit the complete details of the rationale for deciding under recovery, within three weeks. We have also sought the details of the policy of the Finance Ministry, Oil Ministry and the Planning Commission in this regard,” a member in the panel said.
Fixing prices
The panel also sought to know the mechanism of fixing prices for petroleum products and natural gas. A member said the meeting was inconclusive. “We will hold further discussions after studying the Government’s responses,” he said.
It is for the first time that a Parliamentary standing committee has started studying the under recovery mechanism. In one of the earlier meetings, Sinha, who has held the portfolio of Finance Minister twice, reportedly said he himself was unaware of the process of calculating under recovery.
Certain members from South India expressed concern at the slow rate of production of natural gas from the Krishna-Godavari Basin. They said companies and power producers in the South do not get the benefit of the natural gas produced in Andhra Pradesh.