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The government has ordered Oil and Natural Gas Corp (ONGC) to pay a record INR 56,384 crore in subsidy to help state-owned fuel retailers cover part of the losses they incurred on diesel and cooking fuel in 2013-14.  The Oil Ministry on May 21 asked ONGC  and other state oil and gas producers Oil India and GAIL to shell out INR 67,021.14 crore to cover for about 48 per cent of over INR 140,000 crore loss retailers Indian Oil (IOC), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) incurred on selling diesel, LPG and kerosene below cost in 2013-14.

The government will chip in INR 70,772 crore by way of cash subsidy, official sources said. Retailers sell diesel, domestic cooking gas (LPG) and kerosene at rates way below cost. The losses they incur is compensated by way of cash subsidy from government as well as assistance from upstream firms like ONGC.

For 2013-14, ONGC's subsidy share has been fixed at INR 56,384.29 crore, 14 per cent higher than INR 49,421 crore subsidy payout in previous 2012-13 fiscal, they said.

OIL has been asked to pay 11 per cent more subsidy at INR 8,736.85 crore while GAIL's subsidy output has been reduced by 30 per cent to INR Sources said the government had for the first three quarters paid the fuel retailers INR 35,772 crore in cash subsidy and will pay another INR 35,000 crore for the fourth quarter ended 31.03.2014.

Source-On Request