Once allowed, the LPG market is expected to witness a significant expansion and the private operators are likely to benefit. Presently, the private sector operators have to contend with retail LPG which is supplied at a subsidy of Rs 72 per cylinder.

Ramamurthy also hinted at a possible reduction in diesel prices in the near term following considerable fall in the international prices of crude. But he ruled out the possibility of a reduction in petrol prices in the near future.

Emphasising that there was no roll back of reforms in the petroleum sector, he added that a package of further reforms is being prepared and discussions are on among the secretaries of the petroleum, finance and commerce ministries to finalise thedetails. Ramamurthy at the same time said that withdrawal of subsidy would require a major political decision.

He denied involvement of any kick-back on IOC-Reliance deal whereby former would buy 50 per cent of latter's production for marketing. He refuted Subramanian Swamy's charge that the agreed price was artificially high by saying that the price would be as per the monthly import parity price.

Commenting on the whole issue, Ramamurthy said that at the time of granting licence to both Reliance and Essar for setting up a refinery the Narasimha Rao government had assured that the Central Government would provide the necessary marketing arrangement for disposing of the products of the companies. This was because under the existing rules except for IOC, BPCL, HPCL and IBP no other entity can market petroleum products.

It is as per the agreed condition that a MoU was signed between Reliance and IOC for IOC to market 50 per cent of Reliance's output from its refinery, Ramamurthy said. The balance 50 percent would be sold to HPCL, IBP and BPCL.

Ramamurthy has denied any interference by his ministry in the Arochem issue. The dispute between the promoters SPIC and MRL has come close to being resolved with MRL board clearing a proposal to withdraw from the project. At the same time MRL CMD V Shyam Sunder put in his papers giving way to reports that he did so as he was unhappy with the stand of the petroleum ministry on the issue which was favouring SPIC.

Ramamurthy said that Shyam Sunder was resigning as he is moving to a private refinery. As per the settlement between the two, SPIC will pay MRL the cost incurred so far along with interest and MRL will be allotted three-fourth of the land while SPIC will get one-fourth for the Arochem project, he added. The agreement, he said, has not yet reached the ministry for its clearance.