Kirit Parikh report: Udayan says implementation key

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The Kirit Parikh panel submitted its much-awaited report on fuel pricing to the Oil Ministry. The report has suggested, among other things, complete deregulation of petrol and diesel prices.

Udayan Mukherjee, Managing Editor of CNBC-TV18 feels the report is more of wishful thinking. "If the government does implement anything close to what the report is recommending, then forget about the oil stocks, this will go down as the boldest reform the government has taken over the last many years."     
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Here is a verbatim transcript of Udayan Mukherjee's comments on CNBC-TV18. Also see the accompanying video.

It seems like a very wishful report. The optimistic way to look at this is if the government does implement anything close to what the report is recommending, then forget about the oil stocks, this will go down as the boldest reform the government has taken over the last many years. So this is not about oil marketing stocks or ONGC - this report is too big a leap in my eyes. But if it is implemented, the world will take notice that there is some serious reform, which is going on because this will be a serious reform - selling 10% in a follow-on public offer (FPO) of REC is not reform but this is.

But they are probably trying to bite off too much: Deregulate prices of petrol and diesel completely, take kerosene from 9 to Rs 15 a liter, LPG up by Rs 100. The recommendations are too bold. We could have sat down and made those recommendations, free up everything in terms of pricing but one wonders if crude goes up to USD 100 per barrel once again at some point, whether this will hold or all can be passed down given its implications politically also on the inflation front.

So you get that feeling at the pit of your stomach that well meaning that the report is that the government will find a huge challenge to push all of it through in one go and if it does it will be terrific for the market but it will be a difficult one to do. So hopefully it won't be one of those reports which the government says, nods its head and chucks it in the dustbin as they have the last couple of reports.