New Delhi, Dec 14 (IANS) While ONGC chairman R.S. Sharma Monday said that there is “no case” for subsidising petrol, he hoped that the new expert committee will come out with a mechanism for phasing out the current ad-hoc method of paying for under-recoveries of oil marketing companies.
The government had appointed a committee, headed by Planning Commission member Kirit Parikh to come up with a mechanism for the pricing of petroleum products. The report is expected to be submitted in January 2010.

“One thing is obvious, in India there is no case to subsidise petrol,” Sharma said in an interview to CNBC-TV18.

“There would be a case for diesel to be given some subsidy but the consumer obviously must feel the pinch in case the crude prices go up. The consumer must accept this and in that case they have to bear some of the burden,” he said.

As an upstream major, ONGC, along with Oil India Ltd and GAIL India Ltd, have to bear part of the burden of subsidising the price of petroleum products, which includes petrol, diesel, kerosene and cooking gas, sold by oil marketing companies.

So far, the finance ministry has yet to issue oil bonds for the third quarter of this year.

To a query on what could be ONGC’s share of burden for third quarter, Sharma noted: “That is what we have been resenting… that this ad-hoc system should be done away with and we are hoping that once this committee submits the report, the government will be able to take that more definitive view. So as of now, for Q3, we do not know what there in store for us”.

ONGC head expressed optimism that the Parikh Committee will provide a long-term solution on the issue of sharing of the subsidy burden, despite it being the third panel constituted by the government on the same subject.

“They assumed that at the current price level what are going to be under recoveries and how it is going to be sharing. This time, I have made a very strong plea that the committee should take a more dynamic view, they should consider various price levels for the crude oil, we know this is one product, where there is lot of volatility,” said Sharma.