The Government has asked upstream oil firms like Oil and Natural Gas Corporation (ONGC) to give about Rs 36,900 crore towards fuel subsidy during April to December 2011, an official said today.

Fuel retailers Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) lost Rs 97,300 crore in revenue on selling diesel, LPG and kerosene at government controlled rates during the first nine months of the current fiscal.

“Of this, the upstream companies have been asked to make good 37.91 per cent or Rs 36,894 crore,” the official said.

The Government regulates the rates of diesel, domestic LPG and kerosene to keep inflation under check. The revenue loss incurred by retailers on selling fuel below cost is split between the Government and the oil companies.

The Government has so far provided Rs 30,000 crore in cash subsidy to make up for more than half of the revenues that IOC, BPCL and HPCL lost on fuel sales during first half. Upstream firms made good one-third of the revenue loss.

While the Government has not yet provided subsidy for the third quarter, upstream firms are to consider their third quarter numbers this week.

ONGC, Oil India and GAIL (India) had in the first six months paid fuel subsidy at the rate of 33.33 per cent of the revenue loss on fuel sales. And so, they will pay extra in the third quarter to average the payout at 37.91 per cent for the April-December period.

The official said ONGC will pay Rs 30,296 crore for the nine-month period, up 42.3 per cent over Rs 21,291 crore pay-out in the same period a year ago.

The company had in the first six months shelled out Rs 17,760 crore and so it will provide an additional Rs 12,536 crore in the third quarter when it considers Q3 earnings this week.

OIL will pay Rs 4,478 crore towards fuel subsidy for the April-December period as opposed to Rs 1,596.68 crore pay-out in the corresponding period last year.

It had in the first half paid Rs 2,625.09 crore towards fuel subsidy and would give a further Rs 1,852.91 crore in the third quarter when it considers the financial results on Saturday.

GAIL’s share has been fixed at Rs 2,120 crore for the first nine months of current fiscal, the official said.

While the Government had in June 2010 freed the pricing of petrol from its control, it continues to regulate the retail rates of diesel, domestic LPG and kerosene.

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