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New Delhi , Sept. 23

THE Petroleum Minister, Mr Ram Naik, is not keen on implementing a differential pricing scheme to allow marketing companies recover higher product prices at coastal locations and lower prices at inland locations, according to official sources.

The proposal, put up by the Petroleum Ministry bureaucrats, would mean that petrol and diesel would be cheaper in coastal areas like Mumbai and expensive in the hinterland like Delhi. The current disparity in prices across the country is solely on account of the State-specific taxes and duties with the oil companies equalising prices across the country.

Speaking to presspersons here today, Mr Naik said that "he had not studied the file (on the subject) so far" and hence it was "premature to comment on the issue".

Termed import parity pricing, the scheme seeks to compensate the marketing companies the cost involved in bringing the products from the coast into the inland regions. The proposal was triggered by the spate of recent imports of diesel by Essar Oil.

This has eroded the market share of the public sector oil marketing companies Hindustan Petroleum Corporation Ltd, Bharat Petroleum Corporation Ltd and Indian Oil Corporation in the coastal regions since the importers are able to sell to bulk consumers at lower prices compared to the public sector companies.

The Petroleum Ministry is also looking into the issue of whether the imports can be used to service bulk consumers or whether it is to be restricted to servicing retail outlets.

Another major concern is that of imported kerosene and its adulteration of diesel. This year, the imports are estimated to be in the region of a million tonnes, twice that recorded last year. In this regard the Petroleum Ministry has sought a raise in the import duty on kerosene since the incentive to adulterate lies in the lower duty incidence on kerosene compared to that on diesel.

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