Petroleum Products and Administered Price Mechanism (APM)

  • Prices of petrol, diesel, LPG, kerosene, and aviation turbine fuel (ATF) fixed by the Government of India.
  • Idea first proposed – by PV Narasimha Rao Govt  
  • ‘R-committee’ – Reform Committee – under the chairmanship of petroleum secretary Vijay Kelkar
  • Why – to create roadmap for APM dismantling
  • 17 June 1997 – Gujral Govt sets in motion the dismantling process.
  • July 1975 to March 2002 – dismantled on 1st April 2002 – by Vajpayee Govt.
  • Average crude price when APM was dismantled (March 2002) – $23 per barrel.

Various oil pool accounts were created to meet the APM targets.

  • To keep consumers insulated from fluctuating international prices.
  • GOI subsidy with fixed prices and price stability trend.
  • Cross subsidy in domestic LPG and Kerosene prices to lower prices even further.

Led to Partial Price Deregulation

  • Tied to changes in the international prices of the commodities.
  • But with a fixed amount of subsidy from the GOI.

26 June 2010

  • Petrol prices were deregulated.

19 October 2014

  • Diesel prices were deregulated.


16 June 2017

  • Daily price revision of petrol and diesel prices.
  • Full dismantling of petrol and diesel prices.  

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