News Release Details

Press Release on MS Price Revision
New Delhi   15-Nov-2011

The Motor Spirit (MS) prices were de-regulated by Government of India w.e.f. 25.06.2010. Since then, OMCs including IndianOil have the freedom to fix the MS prices. In the current year (2011-12), as a result of rising international MS prices, IndianOil has revised MS prices upward by Rs.4.17 per litre on 15th May’11; Rs.2.62 per litre on 16th Sept’11 and Rs.1.50 per litre on 4th Nov’11.

IndianOil reviews the MS prices on fortnightly basis and based on the review, fixes the MS prices for the next fortnight. In keeping with this practice, IndianOil has reviewed the pricing cycle as prevalent in the last fortnight. The review reveals that at the current prices, there will be an over-recovery of Rs.1.85 per litre. It has, therefore, been decided to revise the MS prices downward by Rs.1.85 (excluding State taxes and levies) w.e.f. 16th Nov.’11.

The reduction has been possible as a result of favourable impact of slide down both in the international prices of MS and in the Rupee / Dollar parity. The Rupee / Dollar exchange rate which had moved high in the second fortnight of Oct’11, came down marginally and remained more or less stable in the vicinity of Rs.49.30 per USD in the relevant first fortnight of Nov’11. It may be noted that the rupee has suffered significant depreciation yesterday and today. If the Rupee / Dollar parity remains at this level or moves further away, its impact would get reflected in the next pricing cycle. The relevant pricing cycle applicable for the fortnight beginning 16th Nov’11 has therefore remained free from any major disturbance in the Rupee / Dollar parity.

With the above revision, there will be no under / over recovery on MS prices during the fortnight beginning 16th Nov’11. Although, the pricing decision in respect of three sensitive products namely HSD, SKO (PDS) and LPG (Dom) is taken by the Government, IndianOil has been sharing the impact of under-recoveries on them. In case of High Speed Diesel (HSD), the international prices have firmed up (a trend exactly opposite to MS) during the fortnight and as a result, the under-recovery of the Company on HSD has increased from Rs.8.58 to Rs.10.17 per litre. The pricing in respect of SKO (PDS) and LPG (Dom) follows a monthly cycle and therefore in respect of these two sensitive products, the under recovery remains at Rs.25.66 per litre on SKO and Rs.260.50 per LPG cylinder as was the case in the previous fortnight.

The per day under-recovery of IndianOil, on HSD is Rs.115 crore; on SKO (PDS) is Rs.48 crore and on LPG (Dom) is Rs. 36 crore. The combined under-recovery of the OMCs on HSD is Rs.218 crore; on SKO is Rs.73 crore; on LPG is Rs.76 crore. The projected total under-recovery of IndianOil for 2011-12 (excluding MS) is estimated to be over Rs.71,000 crore and for OMCs together at a level of Rs.1,30,000 crore.