Economy

Oil companies seek Rs 50,000-cr compensation

Richa Mishra New Delhi | Updated on March 12, 2018 Published on January 27, 2013

Oil marketing companies are seeking compensation of Rs 25,000 crore for the first six months and Rs 25,000 crore for the third quarter of the current fiscal.   -  The Hindu

Public sector oil marketing companies (OMCs) have sought an additional Rs 50,000 crore from the Government as part of the unmet revenue loss incurred by them during the current fiscal for selling petroleum products below cost.

So far, the companies have been partially compensated by the Government in the form of subsidy.

They are seeking remaining compensation of Rs 25,000 crore for the first six months and Rs 25,000 crore for the third quarter of the current fiscal.

“We have written to the Government to compensate us,” R.S. Butola, Chairman, Indian Oil Corporation, said.

This is inclusive of the loss the companies incur on the sale of diesel below the cost price.

The companies were allowed to increase the price of diesel in small doses from January 17 till the loss on fuel sale was neutralised.

Diesel price rise

Effective January 17, the companies raised diesel prices by 45 paise a litre (excluding taxes).

The total loss incurred on sale of diesel for the nine months of the current fiscal was Rs 74,000 crore. Subsequent to the price increase in January, the under-recovery on diesel – bulk and retail – is expected to decrease by approximately Rs 3,400 crore till March 31.

According to the companies, based on the current prices and volumes, the decrease in the under-recoveries annually on diesel will be approximately Rs 15,000 crore.

LPG cylinder subsidy

However, the Government has also increased the cap on the number of subsidised domestic LPG cylinders per household from six annually to nine. The increase in under-recovery on account of this will be Rs 5,200 crore for OMCs till March 2013.

Based on account of volume and price, the increase in under-recoveries on account of subsidised LPG cylinders annually will be Rs 10,000 crore.

[email protected]

Published on January 27, 2013
null
This article is closed for comments.
Please Email the Editor