New Delhi: The Petroleum Ministry wants Rs 56,600 crore more in cash subsidy to partially compensate the state-owned oil firms for losses they incur on selling fuel below cost.
The subsidy sought is over and above the Rs 30,000 crore assistance already promised by the finance ministry for the first half of the current fiscal.
“At the current rates, under-recoveries (revenue loss) of oil marketing companies (OMCs) in the current fiscal is likely to be of the order of Rs 1,30,000 crore,” oil secretary G C Chaturvedi told reporters here.
The oil ministry wants the share of upstream companies like ONGC, which gives discounts on crude oil they sell to refiners to make up for a part of the loss on fuel sales, to be limited to one-third of this revenue loss, or Rs 43,329 crore.
“We would like their share to be one-third. The rest we want the finance ministry to bear,” he said.
In first two quarter of the current fiscal, upstream firms Oil and Natural Gas Corp (ONGC), Oil India and GAIL bore one-third of the Rs 64,900 crore under-recovery on fuel sale.
The finance ministry gave Rs 30,000 crore and the rest was borne by refiners, Indian Oil, Bharat Petroleum and Hindustan Petroleum.
In the April-September period, the three firms lost Rs 64,900 crore on selling the three fuels below cost.
The three firms are losing Rs 11.44 per litre on diesel, Rs 26.94 per litre on kerosene sold through the public distribution system (PDS) and Rs 260.50 per 14.2-kg LPG cylinder supplied to domestic households for cooking purposes.
“The oil marketing companies are incurring a daily under-recovery (revenue loss) of about Rs 360 crore on sales of diesel, PDS kerosene and domestic LPG,” an industry official said.
If the prices are not revised, the oil firms will end the fiscal with a total revenue loss of about Rs 130,000 crore.
The oil Ministry, Chaturvedi said, wanted the upstream share be limited to historic one-third, or 33.33%, of the total under-recovery or revenue loss. The finance Ministry, however, wants the contribution by ONGC, OIL and GAIL India to increase to at least 50%.
“If the burden (of upstream firms) is confined to 33.33%, we will be lucky,” he said.