Oil marketing companies (OMCs) have incurred a cumulative under-recovery of Rs.25,578.57 crore for the first quarter of 2013-14 on sale of sensitive petroleum products. While IOCL has run up an under-recovery of Rs.13,624.73 crore, BPCL and HPCL have piled up under-recoveries of Rs.6,127.88 crore and 5,825.96 crore, respectively
OMCs had incurred under-recovery of Rs.47,811 crore during the first quarter of 2012-13. In other words, cumulative under recoveries have fallen by 46.5% during the first quarter of the current year vis-à-vis during the same quarter in previous year.
However, less under-recovery for the quarter may not necessarily mean lesser burden sharing for upstream companies as these companies have been asked to cough up more than 60% of the under-recoveries for the quarter. For the first quarter of 2013-14 upstream entities have been forced to shell out an amount of Rs.15,304 crore. For 2012-13 upstream companies contributed over 37% of the under-recovery compensation to the OMCs.
Among the upstream companies, ONGC’s contribution is the largest, that is, Rs.12,622 crore. OIL and GAIL have been made to bear Rs. 1,982 crore and Rs. 700 crore for the first quarter of 2013-14 as a part of the burden sharing mechanism. The government has announced a budgetary support of Rs.8,000 crore for the first quarter of the current fiscal which will account for only about 31% of the total under-recoveries.
