Diesel will account for over half of this year's under-recoveries

| Updated on: May 25, 2012
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Indian oil refiners' under-recoveries on subsidised fuel sales at current prices are estimated to increase 29.3 per cent to Rs 1,91,433 crore in 2012-13.

The estimate is based on the refinery gate price of diesel, PDS kerosene and domestic LPG as of May 1, 2012. These estimates were disclosed by the Oil Minister, Mr Jaipal Reddy, in his reply to a Parliament question.

Diesel is expected to account for over half (57 per cent) of the total under-recovery this fiscal, based on the subsidy of Rs 13.91 per litre afforded by the oil marketing companies as of May 1. Domestic LPG will constitute 26.5 per cent of the burden and PDS kerosene the remaining 57 per cent.

Additional burden

The latest petrol price hike is likely to have eliminated the estimated under-recovery of Rs 7.17 per litre on the fuel — totalling Rs 16,061 crore for the whole year — on the fuel at May 1 prices. In the previous year, petrol accounted for 3 per cent of the oil companies' subsidy bill, as per audited figures.

Indian oil refiners' under-recoveries on subsidised fuel sales totalled Rs 1,43,431 crore in 2011-12.

According to audited under-recovery figures for the year, 57 per cent of the total under-recovery was on account of diesel, while 21 per cent was on domestic LPG. PDS kerosene constituted another 21 per cent of the subsidy bill.

In addition to the actual under-recoveries, the additional interest burden of the oil marketing companies due to delayed release of cash assistance by the government amounted to Rs 4,588 crore in 2011-12, implying that their total under-recovery was Rs 1,48,019 crore.


Published on March 12, 2018

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