Standard Post with Image

GAIL, ONGC Dip on Higher Subsidy Burden

  • The government has hiked the subsidy burden of upstream oil companies like ONGC, Oil India and Gas Authority of India Limited.A higher subsidy outflow, which goes to compensate the losses of oil marketing companies (OMCs) that sell fuel at below market prices, will hurt the bottom line of these public sector upstream companies.GAIL was the top loser on the Nifty index today. It traded 1.2 per cent lower at 1007 hours. ONGC was down 0.23 per cent. In contrast, the Nifty index traded with 1 per cent gains.
  • The share of subsidy burden for upstream oil companies has been fixed at 37.91 per cent for the first nine months (April-December) of this fiscal (FY 12), which is significantly higher than the 33 per cent fixed for the first two quarters earlier.Analysts said the subsidy burden in the fourth quarter is likely to be even higher.

Source