ONGC to pay Rs 3,497 cr fuel subsidy in Q3

Oil and Natural Gas Corp, India's largest oil and gas producer, will bear Rs 3,497 crore fuel subsidy in the third quarter ended December 31, 2009.

The Petroleum Minister has divided the Rs 4,361 crore revenue retailers lost on selling petrol and diesel during October-December between ONGC, gas utility GAIL India and explorer Oil India Ltd.

"The retailers lost Rs 4,361 crore in October-December quarter on sale of petrol and diesel," a Petroleum Ministry official said.

Of this, ONGC will pick up Rs 3,497 crore, while OIL will foot Rs 467 crore. GAIL is taking a tab of Rs 397 crore.

ONGC, GAIL and OIL give discounts on crude oil and petroleum products like LPG they sell to retailers Indian Oil, Bharat Petroleum and Hindustan Petroleum to make up for the losses on auto fuel.

The losses on domestic LPG and kerosene are compensated by the government either by cash or bonds.

IOC, BPCL and HPCL are projected to lose Rs 47,400 crore on selling petrol, diesel, LPG and kerosene below cost this fiscal. They may lose about Rs 30,000 crore on cooking fuel, of which the finance ministry has agreed to give Rs 12,000 crore in cash to the retailers, he said.

The three firms currently lose Rs 5.42 a litre on petrol, Rs 3.65 per litre on diesel, Rs 17.23 a litre on kerosene and Rs 299.01 per LPG cylinder.