After last week’s diesel hike and cap on domestic LPG, the oil marketing companies- IndianOil, Bharat Petroleum and Hindustan Petroleum-have another reason to cheer. Crude oil price and dollar are on a declining trend in the current fortnight.
Against an average of $113.64 per barrel in the first fortnight of the month, the Indian basket of crude oil has averaged $111.09 per barrel in the current fortnight so far. The rupee dollar exchange rate that averaged at Rs 55.47/dollar in first fortnight has recovered to $54.20 in the ongoing fortnight. It is estimated that every 1 rupee appreciation of Indian Rupee against dollar decreases the under-recovery of the OMCs on sale of diesel, PDS kerosene and domestic LPG by about Rs 8,810 crore per annum, said a government official. The current fiscal under-recovery based on data of first fortnight was estimated at Rs 167,000 crore.
Last Thursday, the government hiked diesel price by a steep Rs 5 per litre and decided to limit sale of subsidized LPG to six per annum to a consumer. While a consumer can now get up to six LPG at subsidized rate of Rs 399 each, he will have to shell out a market price for additional quantities. The current market price is around Rs 750 per cylinder.
OMCs currently incur an under-recovery of Rs 13.86 on every litre of diesel, Rs 32.70 on every litre of kerosene and Rs 347 on every domestic LPG cylinder. However, given the current trend, these numbers will decline when a review will be done around month end.