Energy - Oil sector

Oil touching $90 per barrel is bad news for India. The basket of crude oil - Indian Crude Basket, that Indian refiners buy comprises Oman-Dubai sour (high sulphur) grade crude and Brent dated sweet (low sulphur) crude in 59.8:40.2 ratio, has touched $80 per barrel.

Will the govt pass this burden to the consumers or will it continue to bleed the Oil Marketing Companies(OMC)?

Lets look into effective crude price per litre in Rupee terms.
A barrel is 117.35 litre. So at an exchange rate of INR39.75 to a USD, the Indian crude basket costs around Rs27.10 / litre for the refiners.
We need to note that the INR has appreciated considerably against the USD. So a some months back crude was at $74 per barrel and 1 USD=44INR i.e. Rs.26.25/litre - so effectively we have seen a about a Re1 rise per litre of crude. Why then is all the furore over subsidy and loss to OMC?

The cost to end consumers comprises of Raw Crude Price + Refining Margin + OMC Margin + Dealer Margin + Taxes.

All other things being constant, retail price of petrol should not increase significantly even with a 6$ / barrel rise in crude. The flaw lies in the host of taxes levied on fuel by Central as well as state govts. These taxes include - Customs duty on raw crude, Sales tax levied by both Central and state govts, Excise and Octroi (on end products - petrol, diesel) and VAT on the distributor and retailers. For every Re1 value of raw fuel, an equal amount is levied as different taxes. This component is the culprit for all the mess in Indian fuel pricing.

I have never been able to under the rational behind Administered Pricing Mechanism (APM) for petroleum products. The Govt first heavily taxes Oil and then offers subsidy to reduce burden on end consumers.