OMCs under-recoveries could drop to Rs 77,000 cr this year

Petroleum secretary Saurabh Chandra said the ongoing slump in crude oil prices could narrow the combined under-recoveries of oil marketing companies (OMCs) to Rs 77,000 crore in the current financial year as compared to the earlier estimate of Rs 86,000 crore.

State-run oil companies sell crude and refined products to state-owned refiners at discounted rates to partly compensate them for losses on retail fuel sales at regulated prices.

Chandra said revenue losses could go down further, as global prices are easing. Those of downstream oil companies for 2013-14 were Rs 1,40,000 crore.

The secretary also said the upstream oil regulator, Directorate General Of Hydrocarbons (DGH) would by the end of the month give a report on the premium to be paid over the recently raised price for natural gas produced from marginal fields. The government had in October raised this price by 33 per cent to $5.61 a million British thermal units. It had announced that gas discoveries made in deepwater, ultra-deep sea or high-temperature and high-pressure fields would be given a premium.

Chandra also said the relaxation in implementation of the production sharing contract (PSC), also granted by the Cabinet in October, had led to 30 oil and gas projects being cleared by the DGH. “These fields have an estimated hydrocarbon resource of $5 billion or Rs 30,000 crore,” he said.

The Cabinet had approved a policy framework for relaxation, extension and clarification in timelines for development and production of oil and gas under the PSC.