Indian fuel under-recoveries may fall by over 25% in FY15: Fitch

India Infoline News Service | Mumbai |

If production from Iraq is affected due to unrest spreading to the south of the country, global oil prices could materially increase

Fitch Ratings says in a new report that India's fuel under-recoveries in the financial year to 30 March 2015 (FY15) are likely to be around Rs. 1trn - more than 25% lower than FY14's Rs. 1.4trn, provided oil prices do not rise significantly. If production from Iraq is affected due to unrest spreading to the south of the country, global oil prices could materially increase.

The decline in the under-recoveries - the difference between the market price and the price set by the Indian government - will be led by a drop in under-recoveries for diesel, the price of which is being gradually increased by the government.

Key developments to watch for over the coming months in the Indian national oil sector include the policies of the new Indian government, the increase in the share of the under-recoveries that upstream companies may have to bear and the movement in global oil prices.

 

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