Oil cos get Rs 8,000 cr as first tranche of Mar qtr subsidy

The Finance Ministry has paid Rs 8,000 crore to state-run oil marketing companies as part subsidy for the March quarter of 2013-14 fiscal.
"The cash subsidy of Rs 24,000 crore will be paid in three tranches over this month. The first tranche of Rs 8,000 crore has been paid and another two of Rs 8,000 crore each would be paid over the next fortnight," an official said.
While the oil ministry had sought Rs 35,000 crore subsidy for the January-March quarter of 2013-14 fiscal, the finance ministry has given a letters of comfort for Rs 11,000 crore. An amount of Rs 24,000 crore is being provided in cash to the state-run fuel retailers.

The letters of comfort will enable oil companies to account for the subsidy in their annual accounts. The actual amount would be received by them only after Parliament nod.
In the interim budget for 2014, the government has estimated oil subsidy at Rs 63,427 crore, of which Rs 35,000 crore was rolled over from the fourth quarter of last fiscal.
Oil subsidies are given to state-run oil marketing firms like IOC, BPCL and HPCL for selling diesel, domestic LPG to households and kerosene through the PDS system below cost.
The revised estimate for petroleum subsidy for 2013-14 is Rs 85,480 crore against a budget estimate of Rs 65,000 crore.