Domestic oil companies will suffer an under-recovery of Rs 5,430 crore during the current year because of the spurt in international prices of crude oil and stagnant prices of domestic LPG and kerosene sold through the public distribution system (PDS).
According to the latest estimates prepared by the government, the under-recovery during the current year on account of domestic LPG will be Rs 3,363 crore. The figure stands at Rs 2,067 crore for PDS kerosene.
Estimates put the government subsidy on every cylinder of domestic LPG at Rs 67.75. Moreover, oil companies incur an under-recovery of Rs 62.27 on each LPG cylinder. Thus the total "subsidy" on every cylinder is Rs 130.02.
Similarly, in the case of PDS kerosene, the government gives a subsidy of Rs 2.45 per litre oil companies have to bear an under-recovery of Rs 1.69 per litre. This takes the total subsidy bill on kerosene to Rs 4.14 a litre.