According to union oil ministry, the under-recovery incurred by oil marketing companies (OMCs) on sale of diesel at subsidised price for the second fortnight effective June 1 rose to Rs 4.87 per litre from Rs 3.73 per litre on May 16. However, under-recoveries towards PDS kerosene and domestic LPG declined to Rs 27.75 per litre (from Rs 27.93 per litre) and Rs 335.14 per cylinder (from Rs 378.38 per cylinder), respectively, the ministry said in a state
Tag: OMCs
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Minister hopes to control fuel subsidy at Rs 800 bn
Finance Minister P Chidambaram expressed confidence that the overall fuel subsidy burden during 2013-12 may not exceed Rs 80,000 crore. The finance ministry is relying on the partial de-regulation of diesel pricing, the cap on subsidised cooking gas (LPG) and export parity pricing to reduce its oil subsidy burden by at least 80 per cent. He said of the Rs 80,000 crore, government has Rs 2
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Ministry to pay Rs 450 bn compensation to OMCs
Union finance ministry agreed to pay Rs 45,000 crore to state-run oil marketing companies (OMCs) for incurring losses on sale of diesel, kerosene and cooking gas at below market price. The Rs 45,000 crore is in addition to the Rs 55,000 crore already paid to the OMCs as compensation for under-recoveries. Thus, for the financial year 2012-13 as a whole, the government will pay Rs 100,000 crore to stat
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OMCs await govt decision on compensation formula
State-run oil marketing companies (OMCs) and upstream firms like ONGC are awaiting the final decision from the government on adopting the formula for compensating the OMCs for under-recoveries. While union finance ministry wants the adoption of export-parity pricing model to compensate for under-recoveries, petroleum ministry opposes the proposal as it woul
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CCI probes cartelisation in petrol pricing
Anti-trust watchdog Competition Commission of India (CCI) has reportedly started probing the alleged cartelisation in the price of petrol in the domestic market by state-run oil marketing companies (OMCs). Suspicion of cartelisation in petrol pricing arose as state-run OMCs usually reduce or hike price of the fuel in unison. The Director General, the investigation arm of the CCI is investigating the matter
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Govt considers proposals of LPG distributors
Reports indicate that the government is considering the proposals of liquefied petroleum gas (LPG) distributors seeking key changes on the proposed distribution policy. During a recent presentation to the union petroleum and natural gas ministry, the distributors called for raising the present ceiling for refill sales by 50 percent. The distributors argue that the existing ceiling on refills is ba
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PSU OMCs seek permission to set up new outlets
Public sector oil marketing companies (OMCs) like Indian Oil Corp (IOC) want the government to allow them to invest on new fuel retail outlets without restriction. It may be recalled that the union government recently prohibited these firms, who are sitting on large pile of debt, from making investment in retail
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State-run OMCs avoid hedging oil purchase
State-run oil marketing companies (OMCs) avoid hedging their spot purchase of crude oil from the global market as it may work in either ways. This was mentioned in the recent report of the standing committee on petroleum and natural gas submitted to the Parliament recently. The report quoted Bharat Petroleum Corporation (BPCL) Chairman as saying that state-run oil firms, which undergo stringent audit by CAG, don't want to take the risk o
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OMCs fail to avoid demurrage cost
A Parliamentary Standing committee strongly felt that the huge demurrage cost of about Rs 665 crore incurred by state-run oil marketing companies (OMCs) between 2009 and 2012 was avoidable and not due to uncontrollable factors. Owing to their failure to have requisite infrastructure, the three OMCs – IOC, HPC and BPCL – paid Rs 665 crore in this period to domestic ports, the com
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Private fuel retailers prefer export over local sales
Media reports indicate that private fuel retailers like Essar Oil, Reliance Industries (RIL) prefer to export diesel instead of selling them in the domestic market despite the government partially de-regulating the pricing regime. This is because these firms fear that the government may again impose price control on diesel during election perio