Lepetkata, Assam: Under-realisation on selling domestic LPG and kerosene through public distribution system (PDS) is likely to be around Rs50,000 crore during the current fiscal, Petroleum Minister Murli Deora said today.
LPG is being sold at a loss of Rs177 per cylinder and kerosene at a price Rs17 per litre below the cost.
“In spite of substantial increase in the price of these fuels in the international market during the last three years, as advised by UPA Chairperson Sonia Gandhi, the government did not increase the price of PDS kerosene and of domestic LPG.
“The government and oil companies are providing subsidy of Rs17 per litre on PDS kerosene and Rs177 per cylinder on domestic LPG,” he said at the foundation laying ceremony of the Rs5,460 crore Assam gas cracker project here.
The UPA government is committed to provide kerosene and LPG at affordable prices to protect the interests of weaker sections of the society, he said indicating no move of increasing cooking fuel prices in the near future.
“In order to protect the aam adami (common man) from the unprecedented rise in international oil prices, the government is bearing the load of under recovery of Rs50,000 crore in the present financial year,” Deora said.
He lauded Prime Minister Manmohan Singh for supporting the issue of oil bonds, which would partly compensate oil firms for selling fuel at subsidised rates.
Oil bonds have helped maintain the financial health of oil PSUs while balancing the need to maintain affordable prices of fuels, he added.
On Assam’s natural gas resources, Deora said, “This is where oil was first found more than a century ago... Assam’s oil and natural gas resources have been a source of strength to us.”
The estimated reserves of oil and oil equivalent gas in Assam are more than 550 million tonnes. Assam produces 4.5 million tonnes of oil out of country’s total oil production of 32.2 million tonnes. Similarly, 2.4 billion cubic metre of gas is produced in the state out of 31.3 billion cubic metre of gas produced in the country.
The major companies operating in Assam in the field of oil and gas business include ONGC, OIL and Assam Gas company.
The state has four refineries with an installed capacity of 7.0 million tones per annum.
Deora said the Government is carving out more areas for exploration and will offer new acreage in forthcoming rounds of bidding under New Exploration Licensing Policy.
Quicker development of discovered reserves are being stressed for early monetisation while simulation techniques are being used to increase production from the existing fields.