Under-recoveries by state-owned oil marketing companies are set to hit a new record in June with the under-realisation on the sale of diesel, the largest selling fuel and also the most politically sensitive, almost matching the subsidised selling price.
At Rs 31.58 per litre, the under-realisation on diesel is a few paise short of the actual subsidised selling price of diesel in Delhi - Rs 31.76 a litre - thanks to an over 14 per cent jump in oil prices in the last month.
| RISING SHORTFALLS | |||
| Revenue losses of the oil companies (Rs/litre) | |||
| May 16-31 | Jun 1-15 | % change | |
| Petrol | 16.34 | 21.43 | 31.15 |
| Diesel | 23.49 | 31.58 | 34.44 |
| Kerosene | 28.72 | 35.98 | 25.28 |
| LPG* | 305.9 | 353 | 15.4 |
| *Per 14.2 kg cylinder | |||
| Under-recovery on diesel almost equal to retail price in Delhi Under-recovery on petrol crosses Rs 20 per litre for the first time | |||
The new under-realisation estimates are for the fortnight beginning June 1 and are based on prices in the last fortnight of May. Diesel accounts for nearly 40 per cent of sales.The under-realisation on petrol also went up, crossing Rs 20 a litre for the first time.The under-realisation on kerosene rose to Rs 35.98 per litre and that on domestic cooking gas rose to Rs 353 per 14.2-kg cylinder from Rs 305.90 last month.
The total subsidy bill for the oil marketing companies, as a result, ballooned to over Rs 650 crore per day from Rs 580 crore a day last month.
|
FUEL paradise... (Fuel prices in Rs/litre) | ||||
|
Petrol |
Diesel | |||
|
Current |
Desired |
Current |
Desired | |
| Delhi | 45.52 | 66.95 | 31.76 | 63.34 |
| Kolkata | 48.95 | 70.38 | 33.92 | 65.5 |
| Mumbai | 50.51 | 71.94 | 36.08 | 67.66 |
| Chennai | 49.61 | 71.04 | 34.4 | 65.98 |
The oil marketing companies - Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) - are therefore pushing for a substantial price increase to avoid supply restrictions.
Government officials, however, said diesel retail prices may not be raised after the inflation rate for the week ended May 17 touched 8.1 per cent. Diesel is widely used in vehicles transporting commodities and a rise in the price of the fuel could impact commodity prices. Analysts said a Rs 3 per litre rise in diesel prices could lead to inflation rising around 20 basis points.
Officials with the oil marketing companies say raising prices of only petrol - one of the options under review - and leaving diesel prices at current levels would not benefit them much as diesel is the highest selling product.
A decision on the price rise is not, however, likely before Wednesday, as there is no political consensus on the move, a top petroleum ministry official said.
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