Diesel accounts to 57% of under-recoveries on sale of sensitive petro products: Moily

The Ministry of petroleum and natural gas has said that the under recovery from sensitive petroleum products is expected to be Rs 1,63,969 crore during the current financial year, out of which 57% would account to diesel.

In a written reply to the Lok Sabha today, petroleum minister M Veerappa Moily said that OMCs are currently incurring an under-recovery of Rs 11.26 per litre on sale of diesel to retail consumers, Rs 33.43 per litre on kerosene and Rs 439 per 14.2 kilo gram cylinder on subsidised domestic LPG.    

The total projected under recovery of Rs 1,63,969 crore of the public sector oil marketing companies (OMCs) on sale of sensitive petroleum products during 2012-13, under recovery on sale of Diesel accounts for around 57%, Moily said.   

He added that the primary objective behind the pricing reforms was for reducing the subsidy burden on petroleum products so as to allocate more funds to social sector schemes for the common man and for ensuring country’s energy security in the long term. The Centre had come out with a decision on decontrol of diesel by mid January, coupled with dual pricing mechanism for bulk and retail customers.

Moily added that the ministry has advised OMCs to take sufficient safeguards and all necessary measures to avoid diversion of subsidized diesel from their retail outlets, following the introduction of dual pricing.