In its fourth report tabled in parliament recently, the standing committee on petroleum and chemicals said it was regrettable that government allowed to the deficit to accumulate, thereby delaying the payment of huge amount (over Rs 12,000 crore) to oil sector PSUs.

Delay in payment to PSUs affected their project implementation programmes, the committee said, adding government had assured that henceforth deficit would not be allowed to occur, the report said.

The committee had recommended that the new concept of "zero deficit" should be ensured through enhanced efficiency of the oil sector and not by increasing prices of petroleum products every now and then. It said it was astonishing to note that even though international prices of crude oil were falling since last year government had proposed a steep hike in prices ofpetrol in the country through this year's budget.

An amount of Rs 12,984 crore has been shown as payment to the oil companies in the settlement of their claims under the administrative pricing in the revised budget for 1997-98, the committee said.

The lion's share from the bond goes to the Indian Oil Corporation at Rs 6478 crore followed by ONGC at Rs 3122 crore, the report said. The petroleum ministry submitted to the committee that delay in settlement of oil company claims would affect import of crude and petroleum products, project implementation programmes, the debt-equity ratio of national oil companies and cause a fall in their credit rating.

The committee criticised the government for proposing a hike in petrol prices in the 1998-99 budget despite a fall in international crude prices since last year.The petroleum ministry informed the committee that with the introduction of special oil bonds, the oil pool deficit was frozen and added that the pool account was meant to be self-balacing over aperiod of time.