Public sector oil marketing companies may have to wait until December to receive cash subsidy from the Government for selling diesel, kerosene (under the public distribution system), and domestic liquefied petroleum gas (LPG) at Government-mandated rates.
According to the Finance Ministry, although the oil marketers will have to wait, a letter — as an instrument of assurance — has been sent to Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation.
“The Government would seek Parliament nod for payment of cash subsidy in the second supplementary demands for grant. This is expected to be tabled in December-January,” the Finance Minster, Mr Pranab Mukherjee, told reporters. The Expenditure Secretary, Mr Sumit Bose, pegged the Q1 outgo for all three companies at Rs 15,000 crore.
A Finance Ministry official, however, told
The three oil marketing companies are estimated to incur a loss of approximately Rs 114,336 crore for the current financial year. Indian Oil alone has to take a hit of approximately Rs 140 crore daily for selling these products at a controlled price.
Currently, oil companies are selling diesel at Rs 6.82/litre below market price, kerosene at Rs 24.93 litre below cost and domestic LPG at Rs 247 (less than market rates) for every 14.2 kg cylinder.
Though the government says that one-third of the loss has to be borne by upstream oil companies like ONGC, Oil India and GAIL, this share was raised last quarter to over 38 per cent. ONGC, on its own, has made a provision for bearing one-third of total under-recoveries.