WE ALL know the critical role played by oil and gas in the economic development of a country. Fuels such as PDS kerosene and domestic LPG are essential commodities, next only to food, and impact the life of common man in a major way. Therefore, managing the supplies and prices of sensitive petroleum products is a key policy issue for the government. The government is committed to ensure high economic growth to eradicate poverty and to remove socio-economic imbalances. The experiences of countries like Japan, Taiwan and South Korea have shown how high growth can eliminate poverty and transform a developing country into a developed one. The two issues that need to be addressed are: sustainability of high growth and moderate inflation, and inclusive nature of growth, which means the aam admi should get his share of the benefits of high economic growth. In the last two years, the Indian economy grew by over 9% per annum, with moderate inflation. Last year, the growth rate was 9.6%, the highest in the last 18 years. Today, India is poised to achieve double-digit growth. However, sustaining this high growth faces the difficult challenge posed by rising oil prices in the international market. India's dependence on oil imports, which is around 75% of the total consumption today, is expected to touch 90% in the next two decades. India's gross oil import bill, which stood at nearly Rs 1,31,000 crore in 2004-05, is expected to be more than double of that during 2007-08. High international oil prices are exerting an upward pressure on domestic prices of petroleum products. The price of petrol on January 31 was Rs 43.52/l in Delhi. If the entire burden of rise in international prices is passed on to the consumer, the price of petrol in Delhi would rise by Rs 8.70/l. Similarly, the price of diesel would rise by Rs 9.60/l and PDS kerosene by over Rs 19/l. Each cylinder of domestic LPG would be costlier by Rs 335. Obviously, full increase in domestic prices in line with rise in international oil prices would have a cascading effect on the entire economy. It would bring hardship to the common man. The burden sharing mechanism put in place by the government has insulated the Indian economy from the inflationary consequence of high oil prices but this cannot be sustained in the long run. To ensure India's energy security, our oil PSUs need to invest about Rs 2.5 lakh crore in expansion and upgradation plans during 11th Plan period. Therefore from the standpoint of the annual Budget exercise, a holistic approach is required, which includes rationalisation of costs, including taxes and duties on petroleum products. The author is Union minister for petroleum and natural gas (As told to Rajeev Jayaswal) M U R L I D E O R A