Monday, January 17 2005 13:14 Hrs (IST) - World Time -

New Delhi: In a bid to reform the oil and gas sector, Finance Minister P Chidambaram today (Jan 17, 2005) said that it would be further opened to competition and duties restructured to make oil companies more efficient and bring down fuel costs.

"Oil and gas sector would be further opened for competition, including in retail sector. The segment requires greater consolidation given the technological challenges that it faces," he said at the Petrotech, 2005.

Consolidation in the oil sector is required since there is a huge supply-demand gap and the country will be more dependent on oil and gas in this century, he said.

Pointing out that taxes on the sector have to be fuel-neutral and subsidies transparent, Chidambaram said that it is a paradox that there are both taxes and subsidies on the same petroleum products.

"Taxes and subsidies in the sector are in conflict with each other," he said, adding any departure from fuel-neutral taxes and transparent subsidies should be avoided as far as possible.

The Ministry is considering restructuring of petroleum duties, he said referring to the Lahiri committee looking into the issue.

The Ministry will take up recommendations of the committee with Prime Minister Manmohan Singh for his approval, he said.

He asked oil companies to improve efficiency so as to reduce petroleum imports and bring down fuel prices.