We want clarity on subsidy-sharing mechanism

Excerpts

While the government is trying ways of reducing under-recoveries and lowering the subsidy burden, there is still no clarity on the sharing of upstream companies. Can you throw some light on this?

Last year, the subsidy burden was revised with a “net realisation” of $56/bbl for us, as against the percentage basis that was practised earlier. This year also provisionally the government has told us to stick to the $56/bbl norm. We don't mind parting with some of our (potential) gains to reduce the government's share of the subsidy burden, arising from the need to compensate for the under-recoveries of oil marketing companies. But we and our investors want clarity in the subsidy-sharing mechanism. The mechanism should be more predictable so that investors know what kind of price realisation the upstream companies can get. We have taken up with the ministry of petroleum and finance that we should be allowed to retain $65/bbl net realisation, as against $56 now.

How much subsidy burden does

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