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Oil marketing Companies to get INR 11k Crore on subsidy in Q1

Government will pay fuel retailers Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL) and Hindustan Petroleum Corp (HPCL) INR 11,000 crore in subsidy for the first quarter. Fuel retailers sell diesel, domestic LPG and kerosene at government controlled rates which are below market price. The loss they thus incur is made good through cash subsidy from the government and dole from upstream firms like ONGC.

"For April-June the government has sanctioned INR 11,000 crore subsidy," an official said here.

Of this, IOC will get INR 6,076 crore, BPCL INR 2,407 crore and HPCL INR 2,517 crore. During April-June, the three fuel retailers cumulatively lost INR 28,690.74 crore on the three fuel. Of this, the upstream firms ONGC, Oil India Ltd (OIL) and GAIL have been asked to meet INR 15,546.65 crore or 54 Percent  of the under-recovery or revenue loss.

After accounting for government cash subsidy, fuel retailers are still left with about INR 2,145 crore of unmet losses. Of the upstream share, ONGC has been asked to chip in INR 13,200.10 crore. This is 4.5 Percent  higher than INR 12,622 crore it had paid in first quarter of previous fiscal, he said.

OIL has been asked to provide INR 1,846.55 crore while the share of gas utility GAIL has been fixed at INR 500 crore. The official said out of the upstream dole, IOC will get INR 8,107.21 crore, BPCL INR 3,830.56 crore and HPCL INR 3,608.88 crore. Of the INR 28,690.74 crore revenue loss in April-June, fuel retailers lost INR 12,129 crore on domestic LPG, INR 9,037 crore on diesel and INR 7,524 crore on kerosene sold through PDS.

Oil firms are currently losing INR 1.33 a litre on diesel, INR 32.98 on PDS kerosene and INR 447.87 (rpt INR 447.87) on domestic LPG, he said, adding at the current rate the three firms are likely to end the fiscal with an under-recovery of INR 91,665 crore.

IOC lost INR 15,328.34 crore on sale of the three products in Q1, HPCL INR 6,620.01 crore and BPCL INR 6,742.39 crore.Last fiscal, oil firms had lost INR 1,39,869 crore on sale of diesel, PDS kerosene and domestic LPG.

Source-On Request