After FinMin, CAG favours OMCs following EPP: Sources

After the finance minister, now the Comptroller and Auditor General (CAG)wants the oil marketing companies (OMCs) to switch over to export parity pricing of petro products, reports CNBC-TV18's Nayantara Rai.

Also read: EGoM on gas to meet on July 25 The CAG did a performance audit on the oil marketing companies (OMCs) from FY08 to FY12. Sources say that in its draft report CAG found is that the companies actually did not follow the trade parity, but rather export parity pricing. The under recovery bill in that period from FY08 to FY12 was lower by almost Rs 64000 crore. Thus, the model being followed by the OMCs is actually ballooning under recoveries. CAG also says that if the companies were to switch to export parity it would fuel efficiency. It would fuel competitiveness and would also bring down the petroleum pricing products for retailers and for consumers. All eyes are now on Kirit Parikh, as he has been appointed by the government to decide between trade parity and export parity. Earlier in the year 2013 the finance minister P Chidambaram and the petroleum minister Veerappa Moily were almost head to head on the situation and now it’s up to Kirit Parikh to decide. CAG has called for a meeting with oil ministry officials, finance ministry officials as well as representatives from the OMCs this week, says sources.