Panel on oil firms’ finances submits report to PMO

August 6th, 2008 - 11:54 pm ICT by IANS  

A file-photo of Manmohan Singh

Bangalore, Aug 6 (IANS) A high-power committee constituted by Prime Minister Manmohan Singh in June to study the financial position of the state-run oil firms in the wake of soaring crude oil prices has submitted its report to the Prime Minister’s Office (PMO), a top official said here late Wednesday. “We have given the report to the PMO with recommendations to address the problems faced by the oil firms due to rising international crude prices. We have assessed the impact of soaring oil prices between 2004 and 2008 on the oil firms,” chief economic advisor Arvind Virmani told reporters on the sidelines of a function.

The three-member committee, headed by Planning Commission member and former cabinet secretary B.K. Chaturvedi, analysed the cash flows and the profitability of oil marketing firms, upstream exploration companies and refineries.

Virmani and Saumitra Chaudhuri, a member of the prime minister’s economic advisory council, are the other two members of the panel.

Virmani, however, declined to reveal the recommendations the panel made to the PMO.

“The committee focused on the issues such as oil bonds, under-recoveries due to huge subsidy on petrol, diesel, kerosene and LPG (liquefied petroleum gas) and cash crunch faced by Indian Oil Corporation (IOC), HPCL (Hindustan Petroleum Corporation Ltd) and BPCL (Bharat Petroleum Corporation Ltd) to buy products in the spot and futures’ market,” he said.

The panel also examined the purported deficit faced by the oil marketing firms due to price constraints imposed on them.

“It’s important to establish the credibility of oil firms and transparency in their financials,” Virmani said after delivering a talk on “Growth Trends and Global Cost Inflation” at a meeting organised by the Confederation of Indian Industry (CII), Karnataka chapter.

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