Chaturvedi commission report

Commodity Online
NEW DELHI : The controversial recommendations of the B K Chaturvedi committee might not get
implemented in the countr as the government is set to re!ect it" according to official sources#
Ho$ever it might accept the high%po$ered committee&s suggestions for imposing a ta' on oil
produced from fields a $arded (efore )***#
The oil ministr has for$arded a preliminar report to the +rime ,inister&s -ffice saing raising petrol
prices ( .s /#01 a litre per month till ,arch /11* and diesel ( .s 1#20 per litre till /1)1 $as not
possi(le#
Earlier the panel recommended for a monthl increase in fuel prices till the are at par $ith costs#
The petroleum minister has called a meeting $ith heads of oil companies Tuesda to deli(erate on
the implications of the panel recommendations#
The petroleum ministr $as favora(l inclined to the proposal for leving a 3pecial -il Ta' on oil
produced from fields a$arded prior to the advent of NEL+ in )***
`No move to ban futures trading'
Our Bureau
New Delhi , July 18
The Union Government on Tuesday asserted that futures trading had helped
stabilise the volatility in prices of wheat and other essential commodities and
there was no proposal to scrap them from the system
!There is no "uestion of banning future trading in essential commodities #uture
trading has stabilised volatility in prices,! the Union $onsumers %ffairs &ecretary,
'r ( 'ansingh, told reporters on the sidelines of a #)$$) meeting
.evie$ of price scenario
*arlier in the day, the $ommittee of &ecretaries on +rices headed by $abinet
&ecretary, 'r ,- $haturvedi, reviewed the price scenario in the country )t will
submit its proposals to the $abinet $ommittee on +rices The meeting was
attended, among others, by 'r 'ansingh and &ecretaries of #ood, )., and
$ommerce 'inistries
)n the previous meeting, the details of which were released on Tuesday, the
&ecretaries observed that spot prices of wheat had declined by /0 per cent from
1s 233 a "uintal on #ebruary 1 to 1s 8/4 a "uintal on July 10 )t observed that
the fall in the price was due to the decision to import five la5h tonnes of wheat
on #ebruary 3 The retail price also declined by nine per cent at Delhi to 1s 16 a
5g from 1s 11, the official release said
&pot prices of wheat are li5ely to soften further on fresh arrivals of the imported
wheat, it said, adding that futures prices would depend on the "uality and prices
Email 4 +rint 4 del#icio#us 4 Digg 4 ne$s5ine 4 6eed(urner 4 7,L8.33
of wheat being contracted for import by private traders at five per cent import
duty
7owever, the retail prices of wheat and sugar have generally remain unchanged
during the last ten days, said the release )n wheat, the retail prices have gone
down in ,angalore and (uc5now, but have gone up in ,hopal, 'umbai and
,hubaneswar, it added
New Delhi8 )n clear indications that the government may dump suggestions of a monthly fuel price
hi5e, +etroleum 'inister 'urli Deora today said not all of the ,- $haturvedi $ommittee
recommendations were implementable
9) am told some recommendations of the $ommittee can be implemented :while some others; could
be difficult to implement,< Deora said
The high=powered ,- $haturvedi $ommittee has recommended raising prices of petrol by 1s3>6 a
litre per month till 'arch 3662 and those of diesel by 1s6?> per litre till 3616 to eliminate subsidies
on the two fuels
)t has also suggested temporary duty changes and the method of calculating retail selling price of
fuel
9) have called a meeting of oil +&U chiefs on 12 %ugust to discuss threadbare the
recommendations,< Deora said
New levies
The three=member panel, headed by +lanning $ommission member , - $haturvedi that was as5ed
by the +rime 'inister to go into the financial position of oil firms, has also proposed levying a @'etro
*AtraB taA of 1s3 per litre on diesel in four instalments in large cities where the fuel was being used
in eApensive cars
9) had some discussions on the recommendations yesterday, but we need to do a thorough analysis
before we arrive at any decision,< Deora said
9The recommendations are being studied and are under consideration of the government,< he noted
Chile the government may reDect a call for monthly hi5e in fuel prices, it may accept suggestions for
pricing domestic fuel at eAport parity rates
The panel sought to lower the benchmar5 used for domestic retail pricing by 16=1>E by shifting
away from the current principle of trade parity pricing
The government is finding it difficult to implement the report in totality as inflation is already at a
10=year high at 1361E
*Aport parity rates or the price that refiners would fetch if the fuel were to be eAported, would be
16=1>E lower than the trade parity pricing followed now, thereby bringing down the proDected
revenue losses
Domestic retail price is currently determined in an 86836 miA of import=parity and eAport=parity
prices
LPG distribution
The $ommittee, besides suggesting freeing auto fuel pricing from government control, also
recommended changes in distribution of domestic (+G by restricting only siA refills per connection a
year
)t also proposed a slash on import duty on petrol and diesel to Fero :from 3>E; as has been done
in the case of crude oil, domestic 5erosene andested to be reduced from 1s10?> per litre to 1s16
The panel also favoured imposing a new taA on oil produced from fields awarded prior to the advent
of New *Aploration (icensing +olicy :N*(+; in 1222 G state=run firms li5e HNG$ would be stripped
of any gains above I?> a barrel while private companies li5e $airn would be taAed at 46E for gains
over this benchmar5 rate