Under-recoveries on Petro Products Set for Drastic Dip: Oil Secretary

The government expects under- recoveries of oil companies to come down substantially in the current fiscal on account of better pricing and stable global crude prices, a top official said today.

"The under-recoveries are expected to come below Rs 1 trillion this fiscal as against Rs 1.40 trillion last fiscal," Oil Secretary Saurabh Chandra told reporters on the sidelines of an event here late this evening.

The expected substantial contraction in the under- recoveries (difference between cost price and selling price) will come on the back of reducing gap in the pricing of petroleum products.

Already, diesel under-recovery has come down to just Rs 1.78 per litre as of August 15 as global crude prices have slipped to a 14-month low.

On the vexed issue of new gas pricing regime, which was to come into effect from April, but deferred to September by the Modi Government, Mr Chandra said a decision is likely to be taken within the three months deadline.

"The government will decide on new gas pricing before September 30."

He said the government is considering the Rangarajan formula on gas pricing, which had recommended doubling of rates to $8.4 Bmtu.