Authored reference · examples dated through 2024
Under-recovery: the book that never reconciles.
This reference explains the relationship between retail pricing, marketing margins, and fiscal policy using historical examples. It is not a current assessment of OMC pricing decisions or government action.
Free-market pricing, daily dynamic
Petrol 2010 · Diesel 2014
On paper, OMCs revise dealer transfer prices daily based on a formula tracking the 15-day average of Indian Crude Basket + exchange rate + refinery gross refining margin. The formula is public; the official price publication carries the notified dealer transfer price daily.
The system was designed to remove the deficit-generating subsidy mechanism of the 2000s where the Union paid OMCs explicit "oil bonds" to compensate for below-cost selling.
Retail freeze during political-sensitive windows
Elections, crude shocks, fuel-inflation runs
Under-recovery is a real P&L hit
Not a subsidy receivable — a direct margin drain
Compensation via excise, not via bonds
The fiscal loop