INDIA: Govt likely to benchmark fuel prices

NEW DELHI: Cost-Plus and Administered Price Mechanism (APM) days may come back as a ghost from the past for Indian refiners if the present moves by the finance ministry is anything to go by.

Indian refiners, who have been selling fuel at globally benchmarked prices since April

The new proposal, which is sure to face stiff opposition from the oil industry, proposes to take into account the costs of operating refineries and the margins earned on the products based on current pricing regime. Oilcos used to sell fuel at cost-plus prices during the APM days when the returns to the oilcos was fixed at 12% post-tax.

Government sources said the finance ministry is preparing a position paper on the subject. The paper will be used to sort out whether there is any need to change the prices of petroleum products, especially petrol and diesel.