Coming to the aid of the public sector oil companies, the Government has given additional cash subsidy of about Rs 20,000 crore for fiscal 2010-11. This is to compensate them for selling petroleum products at a controlled price.
The move will have a positive impact on the balance-sheet of oil companies, which are likely to announce their annual results by end of this month. While IndianOil Corporation is expected to get about Rs 11,027 crore in cash compensation, Bharat Petroleum Corporation will get Rs 4,595 crore and Hindustan Petroleum Corporation will get about Rs 4,379 crore.
According to official sources, with this additional subsidy, the Government has given a total of about Rs 41,000 crore for 2010-11 to the three companies — IOC, BPCL and HPCL.
The companies have received the letter from the Finance Ministry for additional cash subsidy, an official said.
The Government had earlier given about Rs 21,000 crore to the oil companies to compensate them for selling diesel, domestic LPG and kerosene below the market price during 2010-11.
The loss
The three companies currently lose Rs 18.19 a litre on diesel, Rs 29.69 on a litre of kerosene and Rs 329.73 for every 14.2-kg LPG cylinder. For fiscal 2010-11 the companies are estimated to post a loss of Rs 78,000 crore.