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Press Information Bureau
Government of India
Ministry of Petroleum & Natural Gas
30-November-2010 15:40 IST
Loss of Public Sector Oil Corporation
The Minister of State for Petroleum & Natural Gas Shri Jitin Prasada informed the Rajya Sabha in a written reply today that du

The Minister of State for Petroleum & Natural Gas Shri Jitin Prasada informed the Rajya Sabha in a written reply today that during the first half of 2010-11, i.e., April-September, 2010 the OMCs have incurred under-recovery of Rs. 31, 367 crore.  With the decontrol of petrol price and the revision in retail selling prices of diesel, PDS kerosene and domestic LPG with effect from 26th June, 2010, the under-recoveries of the public sector Oil Marketing Companies (OMCs) during 2010-11 at an average annual crude oil price of $ 75 per barrel, are projected to be approximately Rs. 53,000 crore.

 

He also informed that the under-recoveries of the OMCs have been compensated during April-September, 2010 in the following manner:

 

(Rs. crore)

April-September 2010 (Provisional)

Under-recovery on sensitive petroleum products                                   31,367

Burden sharing through:

- Cash assistance provided by the Government                          13,000

- Upstream assistance                                                                           10,456

- Balance under recovery borne by OMCs                                              7,911

 

The Minister stated that the Government has been following a burden sharing mechanism, to ensure that the burden of under-recoveries is shared by all the stakeholders; namely the Government, the public sector oil companies and the consumers in the following manner:

 

(i)                  Government through issuance of oil bonds/cash assistance.

(ii)                Upstream oil companies namely, Oil and Natural Gas Corporation (ONGC), Oil India Limited (OIL) and GAIL (India) Limited (GAIL) by way of price discount on Crude oil and products

(iii)               Oil Marketing Companies (OMCs) by absorbing a part of the under-recoveries and

(iv)              Price increases for the consumers, from time to time.

 

 

RCJ/DT