The Petroleum Division has recommended the complete deregulation of the prices of Superior Kerosene Oil and Light Diesel Oil allowing Oil Marketing Companies (OMCs) to freely fix consumer prices of both the petroleum products on their own.
The Economic Coordination Committee (ECC) of the Cabinet, while considering a summary submitted by the Petroleum Division under the title “Pricing of Petroleum Products” in its meeting held on 31 July 2022, directed inter-alia to submit a summary to deregulate the pricing of kerosene oil and light diesel oil in consultation with relevant stakeholders.
In a summary to be presented to the Economic Coordination Committee (ECC) of the Cabinet, and available with the scribe, the Petroleum Division has proposed that the pricing of SKO and LDO may be deregulated subject to the framework, as given below:
- No imports of SKO and LDO will be allowed in the country without proper policy and permission of the Government or relevant authority,
- After deregulation, SKO/LDO will not be covered under the Inland Freight Equalization Margin (IFEM). Transportation charges may vary from location to location and all the inland transportation costs will be directly payable by the consumer on an actual cost basis.
- Oil Marketing Companies (OMCs) may freely fix consumer prices of SKO/LDO on their own. However, General Sales Tax (GST) and Petroleum Levy equivalent to HSD will be applicable, as per rates notified by the Government from time to time.
- Refineries and Oil Marketing Companies (OMCs) shall be bound to market SKO/LDO conforming strictly to the specifications approved/notified by the Government from time to time.
- Oil & Gas Regulatory Authority (OGRA) shall be the regulator to look after the interests of all concerned and monitor the marketing of the two products.