In order to reduce the burden of India’s
major oil companies over huge subsidies, country’s Oil Ministry has sought over
Rs 8,183 crore cash subsidy in the September quarter.
Indian Oil Corp (IOC), Bharat Petroleum
Corp (BPCL) and Hindustan Petroleum Corp (HPCL) had reported a revenue loss of
about Rs 24,563 crore in the July-September quarter.
Of this, upstream oil and gas producers
— ONGC, Oil India Ltd and GAIL India Ltd will make good Rs 16,379.55 crore and
the rest Rs 8,183.33 crore is being sought from the government as cash subsidy,
ministry sources said.
Fuel retailers sold diesel, domestic LPG
and kerosene at government-controlled rates which are below market price in Q2. The loss they thus incur is made good
through cash subsidy from the government and dole from upstream firms like
ONGC.
Of the upstream compensation, Oil and
Natural Gas Corp (ONGC) will provide Rs 13,641.25 crore, OIL Rs 2,238.30 and
gas utility GAIL Rs 500 crore.
GAIL has already declared its second
quarter earnings without accounting for the subsidy payout and will now have to
make adjustments. IOC will get Rs 9,097.81 crore from
upstream firms, HPCL Rs 3,750.95 crore and BPCL Rs 3,530.79 crore.
During the April-June period, the three
fuel retailers cumulatively lost Rs 28,690.74 crore on diesel, domestic LPG and
kerosene. Of this, the upstream firms met Rs 15,546.65 crore or 54 per cent of
the under-recovery or revenue loss. The government gave cash subsidy of Rs
11,000 crore.
Of the upstream share, ONGC chipped in
Rs 13,200.10 crore, OIL Rs 1,846.55 crore while the share of GAIL was Rs 500
crore.
Sources said diesel price has since been
regulated and the government will from the third quarter not provide any
subsidy on the fuel. Only domestic LPG and kerosene remain to
be subsidised. Petrol prices were deregulated in June 2010.
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