Artefact · interactive
Under-recovery: the book that never reconciles.
India's three downstream OMCs (IOC, BPCL, HPCL) are technically free-market retailers since 2010 for petrol and 2014 for diesel. In practice they hold retail flat through crude shocks for weeks or months, absorbing losses and recovering later when crude softens. The fiction and the reality, in four layers.
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