New Delhi: The Oil Ministry has sought over Rs 8,183 crore cash subsidy to make good one-third of the losses that retailers like IOC incurred on selling diesel and cooking fuel below cost 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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