A return to the ’price control’ regime for auto fuels is definitely not a solution for protecting consumers from the adverse effect of the current global oil price spike, HPCL Chairman MK Surana said.

Any such move will be a setback for the ’deregulation reform’ that took decades to materialise, he told a press conference in the Capital.

Surana said consumers will be better off if GST were to be levied on petrol and diesel, instead of the current taxation regime of excise and VAT.

Responding to a query on the possibility of returning to the cost-plus regime under which the fuel prices were regulated by the government, Surana said, "We had this regime earlier, before the Oil Coordination Committee (OCC) mechanism controlled prices, this was done. So over a period, the industry and the country matured to bring it to this level. In my mind benchmarking to international prices brings efficiency in the system while a cost plus system does not offer the motivation for improving the efficiencies."

Surana said the government can offer comfort to consumers by rationalising taxes it charges on auto fuel under the GST. Commenting on the higher petrol and diesel prices Surana said, "The pump prices have got the taxation component and before the taxation component the prices are more or less the same as before."

MRPL buyout

HPCL is hopeful of acquiring Mangalore Refinery and Petrochemicals before the end of 2018-2019. After recently becoming a subsidiary of fellow public sector undertaking, Oil and Natural Gas Corporation, HPCL has been eying MRPL, the other downstream subsidiary of ONGC.