The reported under-recovery on domestic cooking gas has narrowed sharply, falling to Rs 188 per cylinder in August from Rs 500 in July and more than Rs 700 in June. Accumulated losses at oil marketing companies were reported at Rs 59,000 crore as of July 31.
Under-recovery measures the gap between the cost of supplying a cylinder and the regulated price at which it is sold. When that gap narrows, the pressure on marketing companies eases and the eventual claim on the exchequer for compensation is reduced.
The accumulated figure is the more consequential number. A three-month improvement in the monthly gap does not retire a balance built up over a longer period; it only slows the rate at which it grows.