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CUTS wary over
lack of ‘neutral competition’ in auto fuel retail
The Hindu
Business Line, April 03, 2008
CUTS International has
expressed concern over the lack of “competitive
neutrality” in enabling the private sector to sell
petroleum goods in the market. The Government and the
regulator need to create a level-playing field for
operators to foster competition in the sector.
In a press release issued
here on Wednesday, the CUTS Secretary General, Mr
Pradeep S. Mehta, said, “shutting down of marketing
outlets by private companies such as Reliance may
adversely affect the level of private investment not
only in oil, but in other sectors as well.”
“It is socially justified
to provide subsidies to curb high prices. But at the
same time, subsidies should be given in a transparent
and non-discriminatory manner without having any harmful
effect on the productive efficiency in the sector,” he
said.
With the international
crude oil prices hovering over $100 per barrel and given
that domestic petroleum products retail prices is
regulated, all oil companies including public sector
undertakings are loosing Rs 8-10 per litre on petrol and
diesel, he said.
“It is not possible for
any of the companies to continue with such huge losses.
The only option is to increase the price, if no subsidy
is provided,” Mr Mehta said.
However, if the Government
has decided to keep the petroleum prices at the same
level, it should support all companies by giving
justified amount of subsidy, he said.
Private companies are
meeting the required norms and efficiency targets,
therefore, they equally deserve the same subsidy, he
added.
CUTS has also pointed out
that the consumer choice would be restricted by forcing
them to purchase the product only from the public sector
companies.
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