(2007-03-12) Need to provide level playing field
There is growing unrest among the dealers and employees working in the retail outlets
AddPR.com - New Delhi, March 8: There is growing unrest among the dealers and employees working in the retail outlets of private oil companies as their jobs and investments are under threat due to discriminatory policies of the Government which are heavily loaded in favour of public sector undertakings. The threat is affecting nearly 65000 people employed in the sector and large number of dealers who had invested Rs. 1.5 - 2.0 crores each in these outlets.
These outlets were set up after the Government of India notified a new policy for deregulation and marketing of petroleum products at the market driven prices. This announcement on 1st April, 2002 declared that the consumer prices of motor spirit and high speed diesel will be market determined with effect from that date. Consequent to this policy rights were granted to private players which made heavy investments in order to sell these products at market prices.
But contrary to this policy since mid 2004 the Government began to intervene and prevent PSU marketing companies from increasing domestic prices as a result of hike in international prices. The Government also compensated PSU marketing companies through budgetary support in terms of oil bonds and discount given by upstream players like ONGC. This non transparent process compensated PSUs for about 1/3 of their under recoveries on Motor Spirit and High Speed Diesel in 2005-06 (Rs. 5931 crores out of Rs. 14964 crores) and fully in 2006
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