Lok Sabha Question No. 2432 (UNSTARRED), answered on 2015-12-14
Subject: Expenses Incurred by OMC
Ministry: PETROLEUM AND NATURAL GAS
Asked by: RAM TAHAL CHOUDHARY, HARISH CHANDRA MEENA, RAM CHARITRA, CHANDRAKANT BHAURAO KHAIRE, KAUSHALENDRA KUMAR, B.N. CHANDRAPPA, S.P. MUDDAHANUMEGOWDA, HUKUM SINGH, C.R. CHAUDHARY

## LOK SABHA

## UNSTARRED QUESTION NO. 2432 TO BE ANSWERED ON 14 TH  DECEMBER, 2015

## EXPENSES INCURRED BY OMC

## 2432. SHRI RAM TAHAL CHOUDHARY:

SHRI HARISH MEENA:

SHRI RAM CHARITRA NISHAD:

SHRI CHANDRAKANT KHAIRE:

SHRI KAUSHALENDRA KUMAR:

SHRI B.N. CHANDRAPPA:

SHRI S.P. MUDDAHANUME GOWDA:

SHRI HUKUM SINGH:

SHRI C.R. CHAUDHARY:

## isVªksfy;e vkSj izkÑfrd xSl ea=h

## Will the Minister of PETROLEUM AND NATURAL GAS be pleased to state:

(a)  whether  the  Oil  Marketing  Companies  (OMCs)  have  not  curtailed  the  prices  of petrol/diesel  due  to  high  administrative  expenses  such  as  facilities  to  officers  of  OMC and maintenance and other non-core activities etc. and if so, the details thereof;

(b) the details of expenses incurred by OMCs on such activities during the last three years and the current year, OMC-wise;

(c) whether the oil sector is slipping into the red due to steep downturn in oil prices and cut in price of natural gas resulting job cuts and scrapped projects by several companies and  if  so,  the  details  thereof  alongwith  its  likely  impact  on  upstream  and  downstream companies as well as on their capital expenditure, company/project-wise;

(d) the details of profit/loss earned including turnover by upstream/downstream companies including Gas Authority of India Limited (GAIL) during the each of the last three  years  and  the  current  year  along  with  reasons  for  shortfall  in  the  profits  of  these companies along with steps taken by the Government to improve their performance and margin in the remaining period of the current year;

(e)  whether  there  is  wide  gap  between  the  purchasing  and  selling  prices  of  petroleum products marketing by OMC and if so, the detail thereof and the reasons therefor along with  the  purchase  and  selling  price  of  petroleum  products  of  the  OMC  during  the  last three years and current year; and

(f) whether there is any delay in providing kerosene and LPG subsidy to the OMC during the said period and if so, the details  thereof along with expenditure incurred on subsidy of LPG and kerosene by the Government during the said period year/OMC-wise?

## ANSWER

## isVªksfy;e vkSj izkÑfrd xSl ea=h ( Lora= izHkkj ) ¼Jh /keZsUnz iz/kku½

## MINISTER OF STATE (I/C) IN THE MINISTRY OF PETROLEUM AND NATURAL GAS (SHRI DHARMENDRA PRADHAN)

(a)&(b): The prices of Petrol and Diesel have been made market determined by the Government effective 26 th June, 2010 and 19 th October, 2014 respectively and since then their prices are being decided by the OMCs in line with the changes in the international market prices and other market conditions.

(c)&(d): The reduction in price of crude oil in the international oil markets reduces the realization on sales of crude by the upstream oil companies.   The Public Sector Oil Marketing  Companies  (OMCs)  purchase  crude  oil  based  on  prices  in  international markets. Price of finished products in India is also linked to their price in the international markets. Some OMCs have also reported inventory losses as a result of the fall in the international prices.

Profitability position of each company depends upon various factors. The overall profit reported by the PSU Oil companies during the last three years and 2015-16 (AprilSeptember) is given in Annexure 1.

- (e): The  detailed  price  build-up  of  Petrol,  Diesel,  PDS  Kerosene  and  Subsidized Domestic  LPG;  including  the  prices  at  which  petroleum  products  are  purchased  from Refinery  [Refinery  Gate  Price  (RGP)]  and  the  selling  price  of  these  products  [Retail Selling  Price  (RSP)]  at  the  beginning  of  each  of  the  last  3  years  and  the  current  year (April to September, 2015) are given in Annexure 2.
- (f):            The  Government has provided a fixed fiscal subsidy of Rs.18 per kg under the Direct Benefit Transfer for Domestic LPG during April - October, 2015 and ` 15 per kg for  the  period  November,  2015  onwards.    Also,  the  Government  has  approved  the budgetary support for PDS Kerosene under-recovery for financial year 2015-16 at a rate of Rs. 12 per litre and the remaining under-recovery will be borne by the upstream oil companies.    The details of total subsidy/under-recovery burden on PDS Kerosene and Domestic LPG during the last 3 years and the current year are given in Annexure 3.

## Annexure-1

Annexure referred to in reply to parts (c)&(d) of Lok Sabha Unstarred Question No.2432 asked by Shri Ram  Tahal  Choudhary,  Shri Harish Meena,  Shri Ram  Charitra  Nishad, Shri Chandrakant Khaire, Shri Kaushalendra Kumar, Shri B.N. Chandrappa, Shri S.P. Muddahanume  Gowda,  Shri  Hukum  Singh  and  Shri  C.R.  Chaudhary  to  be  answered  on  14 th December, 2015 regarding 'Expenses Incurred by OMC'

## Turnover /PAT of PSU Oil Companies since 2012-13

(Rs. Crore)

| Companies                       | 2012-13   | 2012-13   | 2013-14   | 2013-14   | 2014-15   | 2014-15   | 2015-16 (April- September)   | 2015-16 (April- September)   |
|---------------------------------|-----------|-----------|-----------|-----------|-----------|-----------|------------------------------|------------------------------|
|                                 | Turnover  | PAT       | Turnover  | PAT       | Turnover  | PAT       | Turnover                     | PAT                          |
| Upstream Oil Companies          |           |           |           |           |           |           |                              |                              |
| ONGC                            | 82248     | 20926     | 83156     | 22095     | 82126     | 17,733    | 43259                        | 10302                        |
| OIL                             | 9525      | 3590      | 9127      | 2981      | 9247      | 2,510     | 5148                         | 1450                         |
| GAIL                            | 47333     | 4022      | 57245     | 4375      | 56569     | 3,039     | 26607                        | 865                          |
| Downstream Oil Companies / OMCs |           |           |           |           |           |           |                              |                              |
| IOC                             | 446121    | 5005      | 427177    | 7019      | 436390    | 5,273     | 186124                       | 6107                         |
| HPC                             | 206529    | 905       | 223037    | 1734      | 206380    | 2,733     | 93724                        | 1268                         |
| BPC                             | 240004    | 2643      | 259933    | 4061      | 237905    | 5,085     | 98339                        | 3394                         |

## Annexure 2

Annexure referred to in reply to part (e) of Lok Sabha Unstarred Question No.2432 asked by Shri Ram  Tahal  Choudhary,  Shri  Harish  Meena,  Shri  Ram  Charitra  Nishad,  Shri  Chandrakant Khaire, Shri Kaushalendra Kumar, Shri B.N. Chandrappa, Shri S.P. Muddahanume Gowda, Shri Hukum  Singh  and  Shri  C.R.  Chaudhary  to  be  answered  on  14 th December,  2015  regarding 'Expenses Incurred by OMC'

## Price Buildup of Major Petroleum Products at Delhi

| Petrol                                                                  | 01.04.2012   | 01.04.2013   | 01.04.2014   | 01.04.2015   | Rs./Litre 1.12.2015   |
|-------------------------------------------------------------------------|--------------|--------------|--------------|--------------|-----------------------|
| Price Paid to refinery                                                  | 43.67        | 41.48        | 45.24        | 27.79        | 23.77                 |
| Other cost elements                                                     | -3.75        | 5.12         | 5.50         | 4.75         | 5.55                  |
| Excise duty                                                             | 14.78        | 9.48         | 9.48         | 17.46        | 19.06                 |
| VAT/ State taxes                                                        | 10.94        | 11.21        | 12.04        | 10.00        | 12.10                 |
| Total                                                                   | 65.64        | 67.29        | 72.26        | 60.00        | 60.48                 |
| Note- Price of Petrol as per IOCL. Diesel                               | 01.04.2012   | 01.04.2013   | 01.04.2014   | 01.04.2015   | Rs./Litre 1.12.2015   |
| Price Paid to refinery                                                  | 45.50        | 42.55        | 47.82        | 28.10        | 24.67                 |
| Other cost elements                                                     | 3.25         | 3.39         | 3.63         | 4.50         | 4.34                  |
| Excise duty                                                             | 2.06         | 3.56         | 3.56         | 10.26        | 10.66                 |
| VAT/ State taxes                                                        | 4.46         | 5.65         | 6.41         | 5.64         | 6.88                  |
| Total                                                                   | 55.27        | 55.15        | 61.42        | 48.50        | 46.55                 |
| Less: Under-recovery                                                    | 14.36        | 6.52         | 5.93         |              |                       |
| RSP                                                                     | 40.91        | 48.63        | 55.49        |              |                       |
| Note - price of Diesel effective 1.4.2015 are as per IOCL. PDS Kerosene | 01.04.2012   | 01.04.2013   | 01.04.2014   | 01.04.2015   | Rs./Litre 1.12.2015   |
| Price Paid to refinery                                                  | 43.22        | 42.70        | 46.57        | 27.98        | 24.40                 |
| Other cost elements                                                     | 2.81         | 2.86         | 2.93         | 3.27         | 3.33                  |
| VAT/ State taxes                                                        | 0.65         | 0.71         | 0.71         | 0.44         | 0.44                  |
| Total                                                                   | 46.68        | 46.27        | 50.21        | 31.69        | 28.17                 |
| Less: Subsidy                                                           | 0.82         | 0.82         | 0.82         | -            | -                     |
| Less: Under-recovery                                                    | 31.03        | 30.49        | 34.43        | 16.55        | 12.93                 |
| RSP                                                                     | 14.83        | 14.96        | 14.96        | 15.14        | 15.24                 |

|                                      |            |            |            |            | Rs./Cylinder   |
|--------------------------------------|------------|------------|------------|------------|----------------|
| Domestic LPG                         | 01.04.2012 | 01.04.2013 | 01.04.2014 | 01.04.2015 | 1.12.2015      |
| Price Paid to refinery               | 867.07     | 733.06     | 806.55     | 451.48     | 419.60         |
| Other cost elements                  | 125.45     | 134.69     | 136.21     | 169.76     | 187.25         |
| Total                                | 992.52     | 867.75     | 942.76     | 621.24     | 606.85         |
| Less: Subsidy                        | 22.58      | 22.58      | 22.58      | -          | -              |
| Less: Under-recovery                 | 570.68     | 434.52     | 506.06     | -          | -              |
| RSP (Rounded)                        | 399.00     | 410.50     | 414.12     | 621.00     | 606.50         |
| Subsidy to consumer after under DBTL | NA         | NA         | NA         | 203.18     | 188.68         |
| Effective Price to consumers         | NA         | NA         | NA         | 417.82     | 417.82         |

## Annexure 3

Annexure referred to in reply to part (f) of Lok Sabha Unstarred Question No.2432 asked by Shri Ram  Tahal  Choudhary,  Shri  Harish  Meena,  Shri  Ram  Charitra  Nishad,  Shri  Chandrakant Khaire, Shri Kaushalendra Kumar, Shri B.N. Chandrappa, Shri S.P. Muddahanume Gowda, Shri Hukum  Singh  and  Shri  C.R.  Chaudhary  to  be  answered  on  14 th December,  2015  regarding 'Expenses Incurred by OMC'

## Total Subsidy & Under-recovery on Petroleum Products

(Rs. crore)

| Particulars                                  | 2012-13   | 2013-14   | 2014-15   | 2015-16 (April- September)   |
|----------------------------------------------|-----------|-----------|-----------|------------------------------|
| PDS Kerosene                                 |           |           |           |                              |
| Total Subsidy on PDS Kerosene                | 30,156    | 31,255    | 24,804    | 7,122                        |
| Domestic LPG                                 |           |           |           |                              |
| Total Subsidy on Domestic LPG including DBTL | 41,565    | 52,247    | 40,569    | 8,814                        |