JOIN USRs 26k cr subsidy sought by OilMin, may get far less
In order to partly compensate revenue losses faced by state-owned oil-marketing companies on selling fuels at subsidised rates in the October-December quarter, the Ministry of Petroleum and Natural Gas has sought Rs 26,000 crore as fuel subsidy.
However, it may get less than half this amount from the finance ministry and the rest only in the next financial year.
"We have written to the finance ministry seeking Rs 26,000 crore subsidy support for covering under-recoveries or revenue loss on diesel and cooking fuel in the third quarter as well as for the losses incurred in the last fiscal," Oil Secretary Vivek Rae said.
Government sources have, however, said that the finance ministry may not be willing to give more than Rs 10,000 crore of the Rs 26,000 crore sought by the Oil MinistryThis means an additional burden on upstream oil companies such as ONGC, Oil India and Gail. Though it is still not clear how this year's subsidy in petroleum products will be shared between the government, the upstream players and the downstream companies like Indian Oil, Bharat Petroleum and Hindustan Petroleum.
The three public sector oil retailers — Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd — are estimated to have faced revenue losses to the tune of Rs 39,725 crore during the third quarter of October-December 2013, of which upstream companies Oil and Natural Gas Corp Ltd and Oil India Ltd will bear Rs 15,937 crore, Rae said.
Of the budgeted petroleum subsidy of Rs 65,000 crore for the current year, the finance ministry had given Rs 45,000 crore for the January-March quarter of 2012-13, and Rs 8,000 crore was paid for the April-June period.
As per calculations of the petroleum ministry, the three state-owned oil retailers are estimated to have lost more than Rs 1 lakh crore on selling subsidised fuel during April-September.
The companies are estimated to lose around Rs 1.4 lakh crore on subsidised fuel sales for the full year.