Don't see fuel price hike this fiscal: Oil ministry sources

Your fuel bills are unlikely to go up any time soon. Oil ministry sources have ruled out a price hike before the crucial elections in five states. Sources add that various formulae for subsidy sharing mechanism are being worked out to help the bleeding oil companies, reports CNBC-TV18's Nayantara Rai.

The oil marketing companies are obviously not a pleased lot. They are expected to end this fiscal with under recoveries being projected at over Rs 1,40,000 crore.

Now even though petrol is a deregulated commodity, in light of those state assembly elections including the big one being of Uttar Pradesh, a status quo is expected on petrol prices. OMCs are losing Rs 1.50 per liter at the moment.

Right now, the oil marketing companies are losing about Rs 430 crore on a daily basis by selling subsidised LPG, kerosene and diesel. A status quo is seen on those prices as well.

Now, as this fiscal is coming to a close, the finance ministry and the petroleum ministry are working out the fine contours for the subsidy sharing mechanism. Nothing has been decided, but there are various formulas doing the rounds.

CNBC-TV18 has picked up two things from the senior oil ministry official about what is being worked out. One, the upstream companies have requested the government that they be able to retain a net realisation of about USD 55-60 per barrel and beyond that can be used for the subsidy burden, part of the upstream companies.

The second, which is what the government has been doing all this time, is fixing it on a percentagewise. Of course, the oil ministry is saying that if you are going to do it on a percentagewise, please fix a upstream burden at 33% and not something ad-hoc like we saw last fiscal when companies like ONGC and Oil India had to share nearly 38% of the subsidy burden. But there is no decision that has been taken on that front just as yet.