The government is bracing itself for the worst on crude prices. While officially it has projected that the under-recoveries of the oil marketing companies will be around Rs 2,45,000 crore during 2008-09, estimating oil at $125 per barrel, it has also chalked out an alternate strategy just in case oil prices flare up again.
The plan is to increase the burden on upstream companies like ONGC (they gain from high crude prices) going forward along with another round of duty cuts.
Says a senior bureaucrat: “The upstream companies were spared from making a major contribution to the bailout package this time. But a greater burden will be put on them in future.” Clearly, a cornered government is fast running out of options.