Govt considers revising ONGC's subsidy-sharing structure

The government is considering reworking the subsidy-sharing formula for Oil and Natural Gas Corp (ONGC), in a bid to lower its discount burden and boost the state-owned oil firm's profits, Oil Minister Dharmendra Pradhan said on Wednesday.

Pradhan, however, did not give details in his written statement while responding to a lawmaker's query.

ONGC, which is the country's largest oil and gas explorer and nearly 69 per cent owned by the government, has seen profits decline due to the sale of crude oil to state-owned refiners at discounted rates.

The government does not regulate prices of petrol and diesel any longer, but public sector companies are forced to discount prices of other common fuels such as kerosene and cooking gas to keep a lid on retail prices.

Any move to lessen its discount burden will be favoured by investors as the government plans to sell a 5 per cent stake, worth around $2.5 billion, in ONGC as part of its massive divestment programme.

ONGC shares ended 3 per cent higher at Rs 371.45 a piece on the Bombay Stock Exchange on Wednesday.

(Reuters)