New Delhi: Oil and Natural Gas Corporation (ONGC) is likely to see a 17.5% rise in its outgo towards subsidising auto and cooking fuel to over Rs20,000 crore in 2007-08.
“We may pay over Rs 20,000 crore subsidy in 2007-08 as compared to Rs 17,024 crore subsidy outgo in the previous year,” ONGC Chairman and Managing Director R S Sharma told reporters on the sidelines of Energy Forum.
The nation’s largest oil and gas producer has to bear about 28.5% of the total under-realisation incurred by state-run retailers Indian Oil, Bharat Petroleum and Hindustan Petroleum on sale of petrol, diesel, domestic LPG and PDS kerosene. It pays the subsidy by way of discounts on crude to these companies.
The government has not allowed the retailers to raise fuel prices despite doubling of crude oil cost. The retailers lost over Rs70,500 crore on fuel sales in 2007-08 and are expected to lose about Rs1,80,000 crore this fiscal. The Centre bears 42.7% of this loss by way of bonds.
Sharma, however, voiced concern at the adhoc manner in which the subsidy payments are fixed and demanded a transparent sharing mechanism.
“ONGC paid over Rs13,000 crore towards subsidising fuel in first nine months of 2007-08 fiscal and may end up paying another Rs7,000 crore for the fourth quarter,” he said.
“The spurt in international oil prices have seen the company’s gross realisation on crude oil sales rise to $120 a barrel, twice the realisation it made a year ago. The average gross realisation on crude oil sales in 2007-08 worked out to $85 a barrel,” he said.
ONGC will invest about Rs18,000 crore in oil and gas exploration and production during the current fiscal, up from Rs16,000 crore in the previous year, Sharma said.
The company is also looking at opportunities for acquisition of oil and gas assets overseas, he said but refused to give details.
ONGC plans to invest Rs71,000 crore in the domestic oil and gas exploration during the 11th Plan Period (2007-12) and Rs45,000 crore in the overseas acquisitions.