Oil and Natural Gas Corporation (ONGC) today said it incurred Rs 4,999 crore subsidy burden in fourth quarter of the last fiscal on account of discounts to public sector oil marketing companies for their losses on sale of petrol and diesel at government-controlled prices.
"Subsidy burden sharing has been restricted to auto fuels only. To that extent, we are comfortable and it is at the expected level," ONGC Chairman and Managing Director R S Sharma told PTI.
Under the present subsidy sharing mechanism, other state-run exploration & production (E&P) firm Oil India has been asked by the government to fork out Rs 662 crore as discounts in crude oil sales to the oil marketing companies (OMC) in the last quarter of FY10.
Oil India's Director Finance T K Ananth Kumar told PTI that "it is on the expected lines".
Under the subsidy-sharing mechanism for 2009-10, the upstream oil companies were required to fully compensate the loss on petrol and diesel incurred by the OMCs — Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation.
The upstream companies and GAIL give discounts on crude oil and petroleum products they sell to retailers.
In the third quarter of 2009-10, the subsidy burden on ONGC and OIL was Rs 3,497 crore and Rs 467 crore, respectively.
However, the discounts given by the upstream companies for full fiscal of 2009-10 amounts to Rs 11,555 crore for ONGC and Rs 1,550 crore for Oil India.
While the GAIL has to fork out Rs 1,327 crore as subsidy for FY10.
The three fuel retailers — Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum — lost Rs 46,051 crore on selling fuel below cost in the 2009-10 fiscal.
The loss of Rs 31,621 crore on kerosene and LPG was supposed to be paid by the government. Out of this, Rs 26,000 crore has already been compensated to the OMCs in cash.
"The OMC's will have to absorb the balance amount," said an Oil-ministry official.
Indian Oil Corp, Hindustan Petroleum and Bharat Petroleum currently lose Rs 272.5 crore per day on selling fuel below cost and may end the current fiscal with a Rs 90,150 crore revenue loss.
Currently petrol is sold at a loss of Rs 6.63 a litre while the loss is Rs 6.25 per litre on diesel, Rs 19.74 per litre on PDS kerosene and Rs 254.37 per 14.2-kg LPG cylinder.
