Under-recoveries of oil marketing companies (OMCs) have fallen significantly due to moderating global crude prices and high refining margins.
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In fact, in petrol, OMCs have reported profits over the past few months—of Rs 7,800 crore in the three months to December last year as compared to losses of Rs 16,400 crore in the three months to June last year—which will enable them to recoup the past losses.
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In the case of diesel and LPG, under-recoveries have come down sharply.
A Kotak Institutional Equities report estimates that under-recoveries of Rs 15,000 crore in the second half of this fiscal as compared to nearly Rs 1.1 trillion in the first half.