State-owned oil firms will pay over Rs 2,500 crore (Rs 25 billion) interim dividend to the government to help bridge its fiscal deficit arising out of shortfall in divestment proceeds.

Oil and Natural Gas Corporation, Indian Oil, Gas Authority of India Ltd and Bharat Petroleum will declare interim dividends for fiscal 2002-03 this month, industry sources said.

ONGC, which is expecting over Rs 8,200 crore (Rs 82 billion) profit this fiscal, is likely to pay close to Rs 1,000 crore (Rs 10 billion) interim dividend for 2002-03.

"The board will meet this month to take a view on it," ONGC chairman and managing director Subir Raha said but refused to give details.

Gail, BPCL and IOC boards are likely to consider the interim payouts in the second fortnight of January, sources said, adding the board meetings would also fix the record date to determine the names of shareholders/beneficial owners who would be entitled to the proposed interim dividend.

The finance ministry, which had pegged divestment proceeds at Rs 12,000 crore (Rs 120 billion) for 2002-03, had earlier asked ONGC to shell out about Rs 5,000 crore (Rs 50 billion) as special dividend. The proposal would have meant draining out ONGC's 90 per cent cash reserve, which would have adversely impacted its ambitious Rs 46,000 crore (Rs 460 billion) investment plans during the Tenth Five Year Plan.

"The petroleum ministry took up the case of ONGC, along with that of IOC, which too had been asked to pay special dividend. In the meeting with the finance ministry, it was decided that the oil firms pay interim dividend against the current fiscal."