Under Recovery or Petroleum Subsidy Burden of Indian Government As on 1st June 2013

Under-Recovery on Diesel effective 01.6.2013 increases sharply to Rs 4.87 per litre; Decline on PDS Kerosene and Domestic LPG OMCs incurring higher Daily Under-Recovery of Rs 276 Crore Daily Crude Oil Price for Indian Basket declines to US$ 99.34/bbl on 31 May, 2013

The Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas hasreviewed international prices of crude oil and petroleum products during the 2nd Fortnight of May 2013. Accordingly, the under-recovery on High Speed Diesel (HSD) applicable for 1st fortnight of June effective 1.06.2013 has increased to sharply Rs 4.87 per/litre. This was Rs 3.73 per litre during 2nd fortnight of May 2013w.e.f. 16.5.2013. In the case of PDS Kerosene and Domestic LPG, under-recoveries for the month of June 2013 fell to Rs 27.75 per litre (from Rs 27.93/Litre) and Rs 335.14 per cylinder (from Rs 378.38 per cylinder)respectively. Product-wise Under-recoveries of Public Sector Oil Marketing Companies (OMCs); Product Diesel PDS Kerosene* Unit Rs/Litre Rs/Litre Under-recoveries effective June 1, 2013 ( Previous fortnight effective May 16, 2013) 4.87 27.75 ( 3.73) (27.93)

Domestic LPG* Rs/Cylinder 335.14 (378.38) *Additionally, a subsidy of Rs 0.82/Litre on PDS Kerosene and Rs 22.58/Cylinder on Domestic LPG is provided by the Governmen and under-recoveries on these products are computed on monthly basis. OMCs, effective 1st June 2013, are incurring daily under-recovery of about Rs 276 crore on the sale of Diesel, PDS Kerosene and Domestic LPG. This is higher than daily under-recoveries of Rs 252 crore for the previous fortnight effective 16.5.2013. The OMCs have already reported Rs 1,61,029 core as gross under-recoveries in the last fiscal 2012-13 against the under-recoveries of Rs 1,38,541 crore incurred during previous fiscal of 2011-12. Following are product-wise details of the under-recoveries for the last 3 years: Product Under Recovery (Rs/Crore) 2012-13 2011-12 2010-11 Diesel 92,061 81,192 34,706

PDS Kerosene Domestic LPG Petrol Total

29,410 39,558 -161,029

27,352 29,997 -138,541

19,484 21,772 2,227 78,190

Details of average International FOB price and Exchange rates are: Particulars Unit Price on last trading day i.e., Fortnight May 16-31, 2013 May 31, 2013 (Previous (previous fortnight May 1 trading day of 30.5.2013) 15,2013) Crude Oil ($/bbl) 99.34 (100.27) 101.07 (101.21) (Indian Basket) (Rs/bbl) 5612.71 (5625.15) 5618.48 (5497.73) Exchange Rate (Rs/$) 56.50 (56.10) 55.59 (54.32) RCJ/RKS Under-recovery 03-06-2013