Are we all set for a face off between the Finance Ministry and Oil Ministry over the calculation of under recoveries? Following January 28's letter from the Finance Ministry on switching to export parity pricing, oil ministry say north block cannot unilaterally decide on switching from trade parity, reports CNBC-TV18's Nayantara Rai quoting sources.
The finance ministry believes that switching to export parity will cut Rs 18,000 cr in under recoveries but oil marketing companies (OMCs) fear a massive margin pressure and closure of refineries in north east and bihar. Oil ministry sources have dismissed these fears as "knee jerk" and quickly added no final call still been taken on export parity pricing.
Meanwhile, upstream companies like ONGC, Oil India and Gail may have to shell out Rs 60,000 crore this fiscal as their contribution to the total oil subsidy bill. This is nearly Rs 5,000 crore more than the last fiscal and translates into a net realisation of approx USD 44.5/bbl for ONGC and USD 50.5/bbl for Oil India. Davos 2013: Oil prices may not breach $100/bbl in 2013 say experts
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