Press Releases

  • TERI gets oil companies together to evolve LPG and Kerosene subsidy solution: BPCL, BP, Reliance, IOCL and HPCL endorse promotion of solar lighting and introduction of 'smart cards' in rural areas

    9 January 2006

    TERI today organized a panel discussion, involving senior representatives of both public sector and private sector oil companies in India, to discuss the issue of meeting the energy needs of the under-privileged in the country. While recognizing the challenge of making cooking and lighting fuel affordable to the poor, the participants at agreed that the current system was, in reality, subsidising the richer strata of society. According to a TERI analysis, just the top 6.75 per cent of the population enjoys 40 per cent of the LPG subsidy; and it is urban areas that benefit from 76 per cent of the subsidy. While the participants lauded the recent efforts by the Government to address this problem, they affirmed that any dual pricing strategy for petroleum products would lead to leakages in the system and would be difficult to control.

    The oil companies - which included Bharat Petroleum Corporation Limited, BP India Services Private Ltd, Reliance Industries Limited, Indian Oil Corporation Limited and Hindustan Petroleum Corporation Limited, -endorsed the concept of moving to a single market determinant price for all petroleum products, including LPG and kerosene. Subsidies could be provided to carefully targeted consumer groups as direct subsidies using technological advances in the form of debit/pre-paid cards. The company representatives endorsed the attractiveness of using LED based solar home lighting systems for meeting energy needs in rural areas, which will also go a long way in enhancing the energy security of the country. Apart from being cleaner and environmentally superior to kerosene lamps, solar home lighting systems are a more efficient source of lighting. Recognizing it as an economically viable option for meeting the lighting needs of the poor, the panelists reinforced the need for providing an institutional framework for promoting solar lighting solutions for rural areas.

    The oil companies agreed to work together to spell out the form and structure of an alternative energy service delivery mechanism that would take care of sustainability of the companies while meeting social objectives.