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| Edited By: Neeraj Thakur |Source: DNA |Updated: Mar 30, 2018, 04:03 AM IST
Under pressure from the petroleum ministry and the oil marketing companies, the ministry of finance on Monday approved Rs8,000 crore cash subsidy for the third quarter of the current fiscal to state-owned oil marketing companies to make up for their under recoveries on selling fuel at a subsidised rate.
The move comes after the three oil marketing companies deferred declaring their results as they were in the red due to mounting under recoveries.
Indian Oil Corporation (IOC) had postponed its third quarter results from January 25 to February 10. Similarly, BPCL has postponed the January 31 board meeting for the third quarter results to February 9 while HPCL has postponed its January 27 meeting to February 11.
“The finance ministry has intimated to us that it has given Rs8,000 crore towards under recoveries for the third quarter of 2010-11. This will mean a total assistance of Rs21,000 crore in the current fiscal,” said S Jaipal Reddy, Union minister for petroleum.
While finance minister Pranab Mukherjee had said earlier that the government would not bear the subsidy burden beyond 33% of the total under recoveries in the current financial year, the latest approval of Rs8,000 crore amounts to 45% of the subsidy sharing in the first nine months of the current fiscal. The ministry of petroleum had asked for a subsidy compensation of Rs10,000 crore for the third quarter.
According to the rough estimates prepared by the ministry, IOC will receive around Rs4,400 crore, Bharat Petroleum Corporation Ltd Rs1,800 crore, and Hindustan Petroleum Corporation Ltd around Rs1,700 crore as subsidy from the government for the third quarter.
According to figures provided by IOC, the company incurred a revenue loss of Rs8,500 crore in the third quarter.
According to petroleum ministry data, the three OMCs incurred a total revenue loss of Rs47,000 crore in the nine months of the current fiscal. The upstream companies that include ONGC, GAIL and Oil India Ltd have been asked to share a burden of Rs15,000 crore for the nine month period.
