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Oil companies recalibrate the surcharge calculations in different states

25 Jul 2012 Evaluate

In an unexpected decision, state-run oil marketing companies have recalibrated the surcharge calculations in different states to align with changes made in local levies by state governments. After the recalibration, petrol and diesel would become marginally cheaper in 11 states, while the price of cooking gas would come down in 12 states from Wednesday. On the same time petrol and diesel would become costlier in seven states, while cooking gas would become costlier in six states.

The decision of recalibrating the state surcharge has mainly been done under a scheme to compensate fuel retailers for irrecoverable taxes like entry tax on crude in the state and surcharge on sales tax and CST on inter-company sale of products levied by local authorities. The retailers would now review the surcharge regime every quarter.

It will be relief to the states where the prices has declined after the OMCs raised petrol prices by 70 paise per litre, excluding taxes from Tuesday, though the relief will be marginal as the price change will be in a range of 32 paise to Re 1 a litre for petrol and diesel, while for cooking gas, the changes would vary between Rs 4.50 to around Rs 10 per cylinder.

Average price of Indian basket of crude is $101.28 per barrel while international petrol price is $111.59 a barrel. Oil firms are losing Rs10.01 a litre on diesel, Rs 27.20 per litre on kerosene and Rs 319 per domestic LPG cylinder. The three state-owned oil marketing firms are projected to lose a record Rs 1,60,000 crore in revenue on sale of diesel, domestic LPG and kerosene at subsidized rates.

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