OMCs sanctioned Rs.11,000 crore government subsidy
The government will pay state-run oil marketers Indian Oil (IOC), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) Rs.11,000 crore in subsidy for the first quarter of this fiscal to recover losses incurred on selling fuel below cost.
"For April-June, the government has sanctioned Rs.11,000 crore subsidy," a petroleum ministry official said Monday.
Losses incurred by oil marketing companies (OMCs) are made up through cash subsidy from the government and transfers from upstream state-run firms like ONGC and OIL.
Of the government subsidy, IOC will get Rs.6,076 crore, BPCL Rs.2,407 crore and HPCL Rs.2,517 crore.
Out of the upstream companies transfer, IOC will get Rs.8,107.21 crore, BPCL Rs.3,830.56 crore and HPCL Rs.3,608.88 crore, the official said.
ONGC has been asked to contribute Rs.13,200.10 crore, OIL asked to pay Rs.1,846.55 crore, while the share of gas utility GAIL has been fixed at Rs.500 crore, the official added.
OMCs, effective Aug 1, 2014, are incurring combined daily under-recovery, or losses, of about Rs.226 crore on the sale of diesel, PDS kerosene and domestic LPG, the government said last week.
The under-recoveries for the financial year 2014-15 are projected to be Rs.91,665 crore while the figure was Rs.1,39,869 crore in the 2013-14.
(Posted on 11-08-2014)