Integrated Energy Policy approved
Our Bureau NEW DELHI
THE Cabinet on Friday approved the Integrated Energy Policy (IEP) that proposed to overhaul fiscal policies, strengthen regulatory structure and establish transparent subsidy mechanism. The policy was drafted in August 2006 by an expert panel chaired by Planning Commission member Kirit S Parikh.
The government would set up a monitoring committee under the chairmanship of Cabinet secretary to review the progress in implementation of IEP, home minister P Chidambaram told reporters after the CCEA meeting.
The policy suggests measures for country’s energy security. Suggestions include lowering energy requirements, substituting imported fuels with alternatives, expanding the domestic energy resource base, maintaining reserve equivalent to 90 days of oil imports, building strategic stockpile of nuclear fuel to counter the risk of disruption of international fuel supply and acquiring energy assets abroad. It also proposes to set up energy-using industries, such as fertiliser plants, in energy-rich countries to save on the fossil fuel.
The policy suggested to do away with the existing system of providing subsidised cooking fuels — liquefied petroleum gas (LPG) and kerosene— by keeping retail prices of the fuels below the market price. Instead, it proposes that subsidy should be targeted to the poor directly through debit cards so that rich people pay the full price of the fuels. The government controls pricing of four sensitive petroleum products — petrol, diesel, kerosene sold in the fair price shops and cooking gas (LPG). The policy also hinted upon the government’s aim to deregulate the petroleum prices suggesting a phased adjustment of domestic petroleum prices to trade parity prices.
The policy recommends setting up of a national energy fund (NEF) to finance R&D in the energy sector. “India needs to sustain an economic growth of at least 9% over the next 25 years... It is necessary to evolve an integrated energy policy that provides a coherent framework of policy covering different energy sources in a consistent manner,” Mr Chidambaram said.