For 2012-13, Finance Minister Pranab Mukherjee provided Rs 43,580 crore towards oil subsidy, given to oil marketing companies (OMCs) for selling diesel, kerosene, and LPG at below market price.
 
 But OMCs see their under-recoveries hitting an all-time high of Rs 2.13 lakh crore if prices are not raised and crude oil remains around $125 a barrel. 
 
 Non-revision of diesel, LPG and kerosene prices, firm crude oil prices and a weak rupee may combine to foil Mukherjee's subsidy-reduction plans.
 
 The Budget provides little scope for meeting the under-recoveries of oil marketing companies. Even if the current formula is continued for the next fiscal, the government’s share of Rs 1.32 lakh crore at 62.1 per cent of Rs 2.13 lakh crore will be much higher than provided in the Budget.
 
 Even if retail prices are revised in April, it is practically impossible for the government to allow a rise that meets the full under-recovery on the products, though it may bring down the overall subsidy burden.
 
 The companies book under-recoveries or revenue losses when they are unable to sell petroleum products on 80 per cent parity with the price the products would fetch if imported.