The government expects under-recoveries of oil companies to come down substantially in the current fiscal on account of better pricing and stable global crude prices.

Speaking to reporters in Mumbai on Wednesday, oil secretary Saurabh Chandra said the under recoveries are expected to come below Rs 1 trillion this fiscal as against Rs 1.40 trillion last fiscal.

The expected substantial contraction in the under recoveries that is the difference between cost price and selling price will come on the back of reducing gap in the pricing of petroleum products. The official informed that diesel under-recovery has already come down to just Rs 1.78 a litre as of Aug. 15 as global crude prices have slipped to a 14-month low.

On the issue of new gas pricing regime, which was to come into effect from April, Chandra said the government will decide on new gas pricing before Sept. 30. He said the government is considering the Rangarajan formula on gas pricing, which had recommended doubling of rates to 8.4 US Dollars Bmtu.