Rs 8,000-cr cash subsidy to oil retailers on Sept 17
“We have been told that the first quarter compensation will come on September 17,” Indian Oil Corporation (IOC) Director (Finance) P K Goyal said.
IOC, Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) lost Rs 25,579 crore on selling diesel, domestic LPG and kerosene below cost in the April-June quarter.
“The government has issued a letter sanctioning Rs 8,000 crore for Q1. Of this, our share will be over Rs 4,261 crore,” he said.
The subsidy support sanctioned is way short of Rs 11,451 crore that the Oil Ministry has sought for the first quarter of the fiscal.
Upstream oil firms like Oil and Natural Gas Corporation (ONGC), Oil India Limited (OIL) and GAIL India will bear Rs 15,303.84 crore and the rest would be borne by fuel retailers. Officials said IOC will get cash subsidy of Rs 4,261.29 crore, BPCL Rs 1,916.57 crore and HPCL Rs 1,822.14 crore for the April-June quarter.
The government bears a part of the revenue losses or under recoveries that retailers incur on selling fuel at government controlled rates. Upstream firms chip in a
substantial portion by way of discount on crude oil and LPG they sell to retailers.
Goyal said 12 per cent depreciation in rupee value against the US dollar has widened losses on fuel sales and oil firms are currently losing Rs 10.22 per litre on diesel, Rs 33.54 a litre on kerosene and Rs 412 per 14.2-kg LPG cylinder.
At current prices, the three retailers will end the fiscal with a total under-recovery of Rs 140,000 crore, he said.
To make up for a part of the Rs 25,579 crore revenue loss on Q1, ONGC will chip in Rs 12,621.78 crore, OIL Rs 1,982.06 crore and GAIL Rs 700 crore. From upstream share, IOC got Rs 8,151.77 crore, BPCL Rs 3,666.36 crore and HPCL Rs 3,485.71 crore.