Despite crude fall, fuel subsidy zooms 35% to Rs 188 cr/day

Losses on sale of subsidised fuel have risen by 35 percent to Rs 188 crore per day even though oil firms have been losing less on LPG and kerosene because of fall in international oil rates.

State-owned fuel retailers are losing Rs 27.60 on sale of every litre of kerosene through the public distribution system (PDS) and Rs 393.50 per 14.2-kg domestic cooking gas LPG, an official statement said.

These are lower than Rs 31.22 a litre loss oil firms were incurring on sale through PDS in second half of last month, and Rs 404.64 per LPG cylinder.

Despite the losses being lower, the statement said, the per day under-recovery has risen to Rs 188 crore from Rs 139 crore.

"Oil marketing companies (OMCs), effective November 1, 2014, are now incurring combined daily under-recovery of about Rs 188 crore on the sale of PDS kerosene and domestic LPG. This is higher than Rs 139 crore daily under-recoveries during previous fortnight," it said.

The statement did not explain as to how the daily under-recoveries have increased even through loss on both kerosene and LPG have declined.

After diesel price was deregulated last month, only two products remain subsidised.

The statement said the under-recovery or the revenue loss incurred on selling fuel below cost, in the first half of current fiscal was Rs 51,110 crore. "The figure was Rs 139,869 crore for full year in the 2013-14."

While the government had freed pricing of petrol from its control in June 2010, diesel was deregulated on October 18.

Since then, diesel rates have cut twice - first by Rs 3.37 a litre on October 19 and then by Rs 2.25 per litre from November 1.