Policy

Oil marketing cos may get cash subsidy up to 15,000 cr

Our Bureau New Delhi | Updated on November 12, 2017 Published on July 29, 2011




The Finance Ministry is likely to provide Rs 14-15,000 crore to the three public sector oil marketing companies. This will be the first instalment of the cash subsidy for fiscal 2011-12.

Cash subsidy is given in lieu of selling diesel, LPG and kerosene below the market price.

Sources said that Petroleum Ministry had sought Rs 29,000 crore cash subsidy for the first three months of the current fiscal.

However, reeling under the pressure of resource crunch, the Finance Ministry has asked them to settle for less than half. A provision will be made in the first supplementary demand for grants which will be tabled in Parliament next month.

The three oil marketing companies, Indian Oil Corporation (IOCL), Bharat Petroleum Corporation Ltd (BPCL) and the Hindustan Petroleum Corporation (HPCL), are estimated to incur loss of approximately Rs 1,10,566 crore for the current financial year. Indian Oil alone will take a hit of approximately Rs 140 crore for selling the products at a controlled price.

Currently, oil companies are selling diesel at Rs 5.63/litre below market price, kerosene at Rs 24.96/litre below cost and domestic LPG at Rs 291.83 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.

Though the Government has not made any announcement this time, ONGC has made a provision for bearing one-third of total under recovery.



Published on July 29, 2011
null
This article is closed for comments.
Please Email the Editor