The Prime Minister has constituted a High Powered Committee under the chairmanship of Shri B.K. Chaturvedi, Member, Planning Commission to examine the financial position of Oil Companies. Dr. Saumitra Chaudhuri, Member, Prime Minister's Economic Advisory Council and Dr. Arvind Virmani, Chief Economic Advisor, Government of India will be the other members of the committee.

The Terms of Reference of the Committee will be:

(i) To examine the impact of the increase in oil prices between 2004-05 and 2008 on the financial position of oil companies, including upstream exploration companies, refiners and downstream Oil Marketing Companies (OMCs).

(ii) To analyze the cash flows and the profitability of all three groups of companies so as to get a clear picture of the changes taking place in their operating positions, particularly the impact on access to credit and cash availability for their operations.

(iii) To revisit the concept of "under recoveries" and examine the reported deficit and the real deficit faced by OMCs as a result of price constraints imposed on them.

(iv) To estimate the financial needs of the refiners and OMCs in order to continue their normal business activities and to meet the energy needs of the economy and the possible sources of funds to meet their financial needs.

(v) To examine the available options for burden sharing by all stakeholders, including upstream exploration companies, refiners, downstream OMCs and stand alone refiners.