NEW DELHI: With international crude prices remaining low, the government might consider deregulating the retail fuel prices to boost competition between the public and private sector oil companies.
“There is also a proposal to free the retail fuel prices from administrative control after a mechanism to compensate for the losses on LPG and kerosene is devised,” a senior Petroleum Ministry official said at Petrotech 2009.
The private sector oil companies, which closed down a majority of their retail stations last year due to skyrocketing crude prices, had been asking the government to free the retail fuel prices to provide a level-playing field vis-À-vis its public sector competitors.
Additional Secretary in the Ministry of Petroleum and Natural Gas S. Sundareshan said capping of the retail prices could be avoided, and the private sector would be encouraged to enter the retail sector and compete with the public sector companies.
“We have to encourage this as oil consumption in India is growing .”