The panel has almost finalized its recommendations and will suggest that the government move to an export parity regime for diesel, which means that the price would be pegged to the export value of the motor fuel. On top of that companies would be allowed to add the cost of moving diesel from one coast to another and local levies such as central sales tax.
Sources familiar with the deliberations of the committee told TOI that a final decision is expected at a meeting on Saturday. Although the finance minis try is learnt to have backed the formulation, the petroleum ministry and the oil marketing companies have still not fallen in line.
If the recommendations are accepted, oil companies would face a hit of around $2-3 a barrel for diesel. At the macro-level this will translate into a meager gain of Rs 3,000-4,000 crore for the Centre, which is a tiny fraction of the oil subsidy doled out by the government. For the finance ministry, it will be a setback as it was banking on the Parikh committee report to help reduce the subsidy it pays to oil retailers for selling fuel below the market price.In fact, North Block had wanted to shift to an export parity pricing regime during the fourth quarter of 2012-13 itself but was prevented from doing so after the oil ministry raised the issue with PM Manmohan Singh. The PM then asked finance minister P Chidambaramfinance minister P Chidambaram to ensure that the pricing formula was not changed midway through the year.
via Business - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNFaGzW9QruuGQeQXEIsQV_KTeD4Og&url=http://timesofindia.indiatimes.com/business/india-business/Parikh-panel-wont-offer-big-relief-on-oil-subsidies/articleshow/23016532.cms
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