Breather for oil PSUs; to get Rs 15,000 cr

The Finance Ministry has sanctioned anadditional Rs 15,000 crore to partially compensate state-owned oil firms forlosses they incur on selling fuel below cost.

"The Ministry of Finance has sanctioned an additionalcompensation of Rs 15,000 crore on November 11," a top Oil Ministryofficial said, adding this compensation is over and above Rs 15,000 croresanctioned for meeting losses of first quarter ending June 30.

Oil marketing companies (OMCs) have reported an under-recovery (revenue loss) of Rs 21,374 crore in the July- September quarter. Ofthis, one-third or Rs 7,124 crore, would be made good by upstream firms likeOil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL).

The Finance Ministry was asked to make good the rest Rs14,250 crore.

"The Finance Ministry has issued the sanction letterand the actual cash would be given the oil companies after the Parliamentapproves supplementary demands for grants in the winter session of Parliamentbeginning November 22," he said.

Indian Oil (IOC), Bharat Petroleum (BPCL) and HindustanPetroleum (HPCL) had lost Rs 43,526 crore in April-June quarter on sellingdiesel, domestic LPG and kerosene at government controlled rates which are waybelow cost.

The Oil ministry had asked for Rs 29,000 crore cash subsidyfor Q1 but got only Rs 15,000 crore.

In the April-September period, the three firms lost Rs64,900 crore on selling the three fuels below cost.

The three firms are currently losing Rs 11.44 per litre ondiesel, Rs 26.94 per litre on kerosene sold through the public distributionsystem (PDS) and Rs 260.50 per 14.2-kg LPG cylinder supplied to domestichouseholds for cooking purposes.

"The oil marketing companies are currently incurring adaily under-recovery (revenue loss) of about Rs 360 crore on sales of diesel,PDS kerosene and domestic LPG," he said.

If the prices are not revised, the oil firms will end thefiscal with a total revenue loss of about Rs 130,000 crore.