New Delhi, Dec. 22
THE Petroleum Minister, Mr Mani Shankar Aiyar, today informed the Lok Sabha that the burden of under-recoveries on the State-owned oil marketing companies (OMCs) continued to rise steeply despite the subsidy sharing mechanism being in place.
Further, this was in spite of discounts given by refineries, he said. The estimated under recoveries suffered by the OMCs on sale of petrol, diesel, LPG and kerosene below their production cost is projected to rise to Rs 38,154 crore during the current year, Mr Aiyar informed the Lower House.
"The estimated under-recoveries was Rs 9,274 crore for 2003-04 and Rs 20,146 crore for 2004-05, which is projected to rise to Rs 38,154 crore during the current year," he said.
In order to compensate the OMCs on account of under-recoveries, the Government has decided to issue oil bonds, he said. The Ministry of Finance has made provision to issue bonds of the face value of Rs 5,750 crore during the current financial year, the Minister said.
Mr Aiyar also said that ONGC has represented to the Government seeking a review of the rationale of the equitable subsidy sharing mechanism under which the upstream companies are sharing the burden along with the Government and the downstream companies, keeping in view the retail selling prices of petrol and diesel, the sharing of under-recoveries by refiners and softening of international price of crude oil and petroleum products.
"The government policy is to equitably share the burden of under-recoveries suffered by the oil marketing companies in the context of anomalous price increases,'' he said.