Dismantling Administered Pricing Mechanism

The most important and radical policy change brought about by the Petroleum Ministry under the stewardship of T.R. Baalu was deregulation of the petroleum sector and dismantling Administered Pricing Mechanism. The objective of this new policy was to empower the public sector oil companies to allow them the autonomy to fix prices for the crude oil and gas as well as the petroleum products in tune with the international prices. This enabled the industry to get rid of the artificial manipulation of the crude and oil product prices and also provide level playing field to all players including private entrepreneurs. The dismantling of the Administered Pricing Mechanism was envisaged to be carried out in a phased manner over a period of four years, starting from 1997.