Govt walks the reform talk, to fast-track oil deregulation
Sunday, May 31st, 2009The Oil Ministry has said that deregulation of oil prices would be taken up by the Cabinet soon and added that tax breaks for gas production would also be taken up shortly. The Ministry said it planned to re-launch New Exploration Licensing Policy (NELP) VIII soon. The Ministry further stated that it would consider the decontrol of APM gas after the oil product deregulation.
Impact on oil stocks:
Speaking on the impact this would have OMC stocks VK Sharma of Anagram Sharma said. “I think it is worthwhile and it will give oil marketing companies as well as ONGC and GAIL some levy from having to bear the burden. The government too will not have to do that much. So I think it augers well for not only marketing companies but the others also for ONGC and GAIL.”
When a new government comes in it does so with a lot of hopes and promises. Murli Deora, when he joined today said that pricing and availability of petroleum products are the key priority of the government and it is going to be priority for the next 100 days. He said that the priority would be to make sure that oil marketing companies run efficiently and profitably and at the same time petroleum products are available in all parts of this country at a correct price.
When we asked whether deregulation on the cards, he said the government was aware of this and would be looking at it and that the cabinet will be discussing this shortly. He first said 6-8 weeks but then he clarified no clear time frame for it as well.
The other key priorities for the petroleum minister at the moment are NELP-VIII. He feels that the tax should be available for gas production as well and not just for oil production. Once there is some clarification on that NELP VIII will be re-launched but the key priority right now is petroleum pricing and availability.