The Finance Ministry has released Rs.17,772 crore cash subsidy to state-run oil marketing companies (OMCs) to cover up a fourth of their losses for selling diesel, kerosene and domestic LPG below cost in the September quarter.
The Finance Ministry, on November 6, informed the Petroleum Ministry that it had approved Rs.8,772 crore as subsidy for Indian Oil Corporation (IOC), Hindustan Petroleum Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL). It is learnt that through a fresh communication, the Finance Ministry informed them of release of another instalment of Rs.9,000 crore as subsidy.
The three OMCs lost Rs.35,328 crore in revenues on selling diesel, cooking gas (LPG) and kerosene at government-controlled rates in the July-September quarter.
Less than half of this, Rs.16,729.74 crore is being made up by upstream oil and gas producers like Oil and Natural Gas Corporation (ONGC) and GAIL (India) and now another quarter is coming by way of cash subsidy.
The Finance Ministry had given Rs.8,000 crore as subsidy to cover for 31 per cent of the Rs.25,579 crore lost on diesel and cooking fuel sales in April-June.
In April-September, the three retailers lost Rs.60,907 crore in revenues on diesel, LPG and kerosene sales.
Fuel retailers had in Q1 of current fiscal lost Rs.25,579 crore on sale of diesel and cooking fuel.
IOC will get Rs.8,634.14 crore, HPCL Rs.3,908.97 crore while BPCL will get the remaining Rs.4,186.63 crore.