Govt may force ONGC to pay Rs 13,764-crore Q3 fuel subsidy
30 Jan 2014 4:54 AM IST
The government has ordered Oil and Natural Gas Corp (ONGC) to pay a near-record Rs 13,764 crore as fuel subsidy for the December quarter, a move that will dent the firm's profitability. Oil and gas producers ONGC and Oil India Ltd bear a portion of the losses that fuel retailers incur on selling some fuels at subsidised rates. The government also offers the oil refiners a cash subsidy as compensation.
The Oil Ministry this week asked ONGC and OIL to give Rs 15,937.59 crore to make up for 40 per cent of the Rs 39,725 crore revenue that retailers lost on selling diesel, domestic LPG and kerosene at government-controlled rates in the October-December quarter, official sources said.
It expects the Finance Ministry to compensate for the remainder by way of a cash subsidy. ONGC's share of the burden will be Rs 13,764.11 crore, while OIL will bear Rs 2,173.48 crore. Gas utility GAIL India will not pay any subsidy in Q3.
ONGC's liability is near the record Rs 13,796.04 crore that the firm had to shell out in Q2. Sources said the share of Indian Oil Corp (IOC) in the support provided by the two exploration companies would be Rs 8,261.30 crore. Bharat Petroleum Corp (BPCL) would get Rs 3,971.31 crore and Hindustan Petroleum Corp (HPCL) the remaining Rs 3,704.98 crore.
The Oil Ministry this week asked ONGC and OIL to give Rs 15,937.59 crore to make up for 40 per cent of the Rs 39,725 crore revenue that retailers lost on selling diesel, domestic LPG and kerosene at government-controlled rates in the October-December quarter, official sources said.
It expects the Finance Ministry to compensate for the remainder by way of a cash subsidy. ONGC's share of the burden will be Rs 13,764.11 crore, while OIL will bear Rs 2,173.48 crore. Gas utility GAIL India will not pay any subsidy in Q3.
ONGC's liability is near the record Rs 13,796.04 crore that the firm had to shell out in Q2. Sources said the share of Indian Oil Corp (IOC) in the support provided by the two exploration companies would be Rs 8,261.30 crore. Bharat Petroleum Corp (BPCL) would get Rs 3,971.31 crore and Hindustan Petroleum Corp (HPCL) the remaining Rs 3,704.98 crore.
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