According to government sources, under-recovery on the sale of fuel products by state-run oil marketing companies (OMCs) at subsidised price may be around Rs 125,000 crore and Rs 150,000 crore in 2013-14.
This estimate is sharply higher than the government’s earlier estimate of Rs 80,000 crore because of a considerable depreciation of rupee and the marginal rise in crude oil price.
For every rupee fall against the dollar, the under-recovery will increase by Rs 8,000 crore. Every dollar increase in crude oil prices would add Rs 4,000 crore to
the loss.
The Indian crude oil basket price rose to Rs 104.56 a barrel recently from about $99 a barrel during the first quarter of the financial year.
According to the Petroleum Planning and Analysis Cell, the under-recovery on diesel for the first fortnight of July increased Rs 2.29 a litre to Rs 8.60 a litre, from Rs 6.31 a litre during the previous fortnight.
In the case of kerosene and domestic cooking gas, the under-recoveries for July rose to Rs 30.68 a litre from Rs 27.75 a litre and to Rs 368.58 a cylinder from Rs 335.14 a cylinder, respectively.
Earlier, the government’s subsidy share was estimated at Rs 20,000 crore. This estimate is expected to rise considerably now with the depreciation of rupee and rise in crude oil price.
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