Extending some comfort to the public sector oil marketing companies (OMCs), the Finance Ministry has issued a ‘comfort letter’ stating that Rs 25,000 crore additional cash subsidy for the fiscal will be given for selling diesel, domestic LPG and PDS kerosene at controlled price.
Sources said, only after the Parliament approves the supplementary demands for grants will the companies get actual cash.
The three OMCs – Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation – were seeking additional compensation of Rs 50,000 crore from the Government, as part of the unmet revenue loss incurred by them during the current fiscal.
The companies have been so far partially compensated by the Government in form of subsidy. The companies are seeking remaining compensation of Rs 25,000 crore for the first six months and Rs 25,000 crore for the third quarter of the current fiscal.
For the first six months of the current fiscal (2012-13) the total under recovery - loss suffered by OMCs for selling diesel, domestic LPG and PDS kerosene at controlled price - Rs 85,600 crore. Both the Government and the upstream companies (ONGC, Oil India and GAIL) compensated Rs 30,000 crore each. The unmet amount was Rs 25,400 crore.
Out of this Rs 25,000 crore additional subsidy grant Indian Oil Corporation would get Rs 13,474.56 crore, Bharat Petroleum Rs 5,987.25 crore and Hindustan Petroleum Corporation PCL Rs 5,538.19 crore.
For the full fiscal the OMCs are expected to lose Rs 1,61,607 crore for selling petroleum products at controlled price.