Govt raises subsidy burden for explorers

NEW DELHI (TIP): Oil minister Dharmendra Pradhan on Thursday defended public sector fuel retailers against the federal auditor’s criticism over allegedly making windfall gains due to faulty pricing method, even as the government raised the fuel subsidy burden on explorers. Pradhan said the three oil refining and fuel retailing companies had absorbed Rs 28,680 crore in losses on fuel sales between 2007-08 and 2011-12 audited by the Comptroller and Auditor General.

The auditor’s report had said the companies had overcharged customers Rs 26,626 crore in the five-year by way of notional levies in the pricing formula. Inaugurating a workshop on margin management, Pradhan said the oil firms follow a pricing methodology for calculating retail price on the basis of virtual imports by adding customs duty, freight, insurance, ocean loss and wharfage charges to prevailing international price of petrol, diesel, cooking gas or kerosene. ONGC’s subsidy outgo would rise by 4.5% in the April-June quarter to Rs 13,200 crore. OIL has been asked to provide Rs 1,846.6 crore, gas utility GAIL’s share has been fixed at Rs 500 crore.

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Volume 10 Issue 41 | New York | Oct 21

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