The Centre has agreed to give an additional Rs.3,000 crore to oil marketing companies to compensate for the losses they made by selling fuel below cost. “I am told that the Ministry of Finance has released an additional Rs.3,000 crore in subsidies to oil marketing companies,” Petroleum Secretary S. Sundareshan told journalists here.
He further said that with the additional dole out, Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum would get a total of Rs.13,000 crore in cash to make up part of their revenue loss. The Petroleum Secretary, however, said it was not the final settlement as the final compensation to the fuel retailers would be decided at the end of this fiscal.
Notably, Petroleum and Natural Gas Minister Murli Deora had met Union Finance Minister Pranab Mukherjee on Friday and sought hike in cash compensation for OMCs, which lost over Rs.31,000 crore on selling fuel below cost before the fuel pricing was freed in June.
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The Ministry had been asking the Finance Ministry to make up for 50 per cent of the revenue loss as the retailers could not absorb more than Rs.6,000-7,000 crore loss in the entire financial year. The three firms lost Rs.31,367 crore in revenues during April-September on selling diesel, domestic LPG and kerosene below cost.