Government to bear entire burden on sale of PDS Kerosene and subsidized LPG for 2016-17 


New Delhi, Nov 21: The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Lok Sabha in a written reply today that for the financial year 2016-17, it has been decided that entire burden on sale of PDS Kerosene and Subsidized Domestic LPG will be borne by the Government.

The total subsidy/under recovery on petroleum products since 2013-14 is given below:

(Rs. crore)

Particulars 2013-14 2014-15 2015-16 H1 2016-17
Diesel 62837 10935 0 0
PDS Kerosene 31255 24804 11496 4123
Domestic LPG 52247 40569 16074 4557
Total 146339 76308 27570 8680

The burden sharing of the under-recoveries by the upstream companies since 2013-14 is given below:


Particulars 2013-14 2014-15 2015-16 H1, 2016-17
Total Under-recoveries 139869 72314 11515 4123
Under-recoveries         borne by Upstream Companies 67021 42822 1251 0


The details of Net Profit After Tax (PAT) reported by the PSU OMCs since 2013-14 are given below:

(Rs. crore)

Companies 2013-14 2014-15 2015-16 Q1, 16-17
IOC 7,019 5,273 10,399 8,269
HPC 1,734 2,733 3,863 2,098
BPC 4,061 5,085 7,432 2,621


Refining of crude oil is a process industry, where crude oil constitutes around 90% of the total cost. Crude oil is processed through several processing units.  Each of these units produces intermediate products streams, which require extensive reprocessing and blending.  This results in difficulty in apportioning the total cost of individual refined products with reasonable accuracy.  Therefore, individual product-wise costs are not identified separately.


The prices of Petrol and Diesel have been made market determined by the Government effective 26th June, 2010 and 19th October, 2014 respectively.   Since then, the Public Sector Oil Marketing Companies (OMCs) take appropriate decision on pricing of these products in line with their international prices and other market conditions.  The Government continues to modulate the effective price to consumer for Subsidized Domestic LPG and Retail Selling Price (RSP) of PDS Kerosene.  Further, price of CNG/PNG is fixed by the concerned City Gas Distribution (CGD) entities as per market dynamics.

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Source: PIB


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