MINISTER OF STATE IN THE MINISTRY OF PETROLEUM AND NATURAL GAS (SHRI R. P. N. SINGH)
(a) to (c): Under the burden sharing mechanism, Government is providing partial compensation of the under-recovery incurred by the Public Sector Oil Marketing Companies (OMCs). Government had issued Oil bonds to the OMCs for their under-recoveries up to the year 2008-09. However, since 2009-10, the Government has been providing cash assistance to the OMCs towards the share of the Government for compensating the under-recoveries of the OMCs.
Compensation of under-recoveries depends upon various factors including the price of the commodities in the international market as well as in the domestic market, changes in volume of consumption and ability of the oil companies to share it. Hence, it is not possible to estimate the under recovery for future years. Therefore, it is difficult to evolve a fixed policy to fund under-recovery as it varies from quarter to quarter even in a particular year. However, the details of compensation/assistance given to the OMCs by the Government during 2011-12 (actual) and budget estimate for 2012-13 are given below:-
(RS crore)
S. No. Type of Subsidy/ Compensation 2011-12 2012-13 (BE)
1 Fiscal subsidy under âPDS Kerosene and Domestic LPG Subsidy Scheme, 2002â 3,000 3,050
2 Fiscal subsidy under Subsidy under âFreight Subsidy (For Far-Flung Areas) Scheme, 2002â 23 26
3 Compensation to OMCs for under-recoveries 45,000 40,000
4 Natural Gas subsidy for North East 458 504
5 Total Subsidy (1+2+3+4) 48,481 43,580
during April-December 2011.