Under recovery figures of oil cos fictitious: CPM

CPM has challenged the figures of under-recoveries by oil companies, saying these were 'fictitious and totally absurd'.

Seeking withdrawal of the hike in petrol, diesel and LPG prices, a senior CPI(M) MP on Monday challenged the official figures of under-recoveries by oil manufacturing companies, saying these were ‘fictitious and totally absurd’.

In a letter to Prime Minister Manmohan Singh, Rajya Sabha MP Tapan Sen said in his address to the nation, Singh had mentioned that the oil companies were facing under- recoveries worth Rs 2,45,305 crore which had led the government to hike petrol prices by Rs five per litre.

In the same vein, a senior official of the Petroleum Ministry had said the entire under-recoveries could be made up if petrol was priced at Rs 71 per litre at the present crude prices level of USD 130 a barrel.

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“As per lay-man’s calculation, Rs 71 per litre is equivalent to USD 256 per barrel. As you are well aware, the cost of crude comprises 93-94 per cent of the cost of the finished product viz petrol, diesel etc.

“The figure of 126 (256 minus 130) dollar per barrel as conversion cost of refining crude to petroleum product appears to be fictitious and totally absurd, specially in India which is self-sufficient in respect of refining,” the CPI(M) MP said in the letter.

“I am sure, the absurdity and totally speculative nature of such product costing has prompted you to form a Committee to find out the real mystery behind the figures, euphemistically designated as ‘under-recoveries’ in the official circles and ‘losses’ for public consumption,” he said and demanded withdrawal of the decision to hike petro-product prices.

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