Govt asks upstream oil companies to give Rs 36,900 cr in fuel subsidy

Posted By: Religare
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Oil companies to give Rs 36,900 cr; Govt
Consequent to the ongoing losses incurred by the state run fuel retailers, the government has asked the upstream oil companies including Oil and Natural Gas Corporation (ONGC) and OIL to give about Rs 36,900 crore in fuel subsidy during April to December 2011, said the sources in the know of the development.

As per the sources, ONGC would be paying Rs 30,296 crore in the nine-month period, up 42.3 per cent over Rs 21,291 crore payout in the same period a year ago.

Indian Oil Corp (IOC), Hindustan Petroleum (HPCL) and Bharat Petroleum (BPCL) have incurred a loss of Rs 97,300 crore in revenue on selling diesel, LPG and kerosene at government controlled rates during the first nine months of current fiscal, added the sources.

The government in a bid to curb the inflation, kept the diesel rates under its control, thereby charging much lesser than the market price.

The government, in June 2012 freed pricing of petrol from its control, however till date continues to regulate retail rates of diesel, domestic LPG and kerosene.

Following the government's control, the revenue losses are currently split between the government and the oil companies.

Consequently, the government has already paid Rs 30,000 crore in cash subsidy to make up for more than half of the revenues that IOC, BPCL and HPCL lost on fuel sales during the first half.

Dion Global Solutions Ltd

Read more about: government, ongc, oil and gas, bpcl
Story first published: Monday, February 6, 2012, 23:30 [IST]
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