Millennium Post

Subsidy burden becoming backbreaking: Vasudeva

Oil and Natural Gas Corporation Ltd (ONGC) has said that the subsidy burden is now almost becoming backbreaking, hinting that the subsidy bill for the upstream oil and gas major may swell.

'Subsidy burden is now almost becoming backbreaking. They are saying that this year's burden (combined) will be around Rs 1,40,000 crore,' Oil and Natural Gas Corporation Ltd Chairman and Managing Director Sudhir Vasudeva said when asked about subsidy and under-recovery situation.

Speaking on the sidelines of Institute of Chartered Accountants (ICAI) annual conference in the city, he said, 'Ultimately what is important is how much the government is looking to take the burden. If the government passes everything to us, then what happens?'

ONGC's subsidy during first half of the current fiscal had been to the tune of Rs 23,400 crore, Vasudeva said.

Due to weak rupee and rising crude prices, the overall underrecovery for oil marketing companies (OMCs) in the current financial year may touch Rs 1,40,000 crore from Rs 80,000 crore as pegged in the begining of this fiscal.

Speaking on the memorandum of understanding (MoU) with Petrovietnam in which it was offered five blocks to ONGC Videsh, Vasudeva said, ‘Now the blocks have been offered. Unless we see them, the size, the prospectivity etc, nothing canbe said on projectedinvestment in these.’
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