Need to ensure market-driven pricing for petroleum products: Kirit Parikh

In an interview with ET Now, Kirit Parikh, Oil & Gas Expert, talks about the revision of gas prices and the need to keep a check on the excesses of OMCs. Excerpts:

ET Now: What is your call on the expert panel’s view on gas prices?

Kirit Parikh: The expert panel’s term of references is being revised. It will be wrong for me to give my opinion before the panel meets and completes its report. I have been always arguing that there should be sensible trade parity pricing in a competitive environment.

However, since ours is not a competitive environment and since the OMCs say they have been burdened with the legacy of setting up refineries, we should look at it in a slightly different way and we will do that.

ET Now: OMCs feel that it will be a hit of Rs 18,000 crore per annum. What will you be looking at when you are working on this format?

Kirit Parikh: We will see what their concerns are and what the arguments are from different sides. One has to find out what is the real loss that they would have and what is the loss due to their inefficiencies or the loss due to legacy issues. We will try to set them out and find ways by which they can be compensated for loss beyond their own control.

ET Now: What is your opinion on revision of gas prices that seems to be the biggest policy reform the sector has to see?

Kirit Parikh: I am not looking at the issue of gas price reform. So I do not know what has been happening in the system. However, we should have gas prices which are comparative. If we are importing a large amount of gas, we should have an import parity pricing on gas. We should also allocate APM gas only to the highest priority sectors like fertilisers.

It does not make any difference in the government subsidy budget even if fertilisers are charged full gas price. However, if we have certain priority consumers, we can supply them lower priced gas, but the rest of them should be in a competitive market.