PetroMin allays Oil firms' fears over under-recovery losses

The Oil Ministry today sought to soothe the frayed nerves of oil marketing companies in view of the huge under-recoveries suffered by them, by saying that they need not fear from suffering losses.

"Solutions will be found to the problem, as the Finance Ministry has assured us. They have no reason to fear from suffering losses," Petroleum Secretary S Sunderashan told reporters at the inauguration of new hydrocracker unit and expansion of Indian Oil Corporation's (IOC's) Haldia refinery's capacity here.

He said oil companies had been suffering from under-recoveries since 2006-07, ranging from Rs 50,000 crore to Rs 1.5 lakh crore, but none of the oil companies had reported losses so far.

The projected under-recovery for 2010-11 on account of selling diesel, LPG and kerosene is likely to be in the region of Rs 70,000 crore.

To a query, he said that government had not taken any decision about IOC's follow-on public offer and no time-frame for it.

Sunderashan said the government had approved ONGC's 5 per cent disinvestment.
    
Earlier, speaking at the inauguration ceremony, Oil and Petroleum Minister Murli Deora said that the Ministry's request to the Finance Minister Pranab Mukherjee, who was present, is to continue with the subsidies provided to the oil companies.