State-run gas utility GAIL (India) Ltd will shell out Rs 379 crore (Rs 3.79 billion) while Oil India Ltd would have to pay Rs 589 crore (Rs 5.89 billion) for subsidising the cooking fuel, official sources said.
As per a government diktat, upstream firms ONGC, GAIL and OIL subsidise one-third of the under-recovery on selling fuel below the cost.
For July-September quarter, ONGC would give a discount of $26.1 per barrel on crude oil it sells to refiners Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum.
ONGC had in April-June quarter this fiscal paid out a subsidy of about Rs 5,120 crore (Rs 51.20 billion), which worked out to $26.5 a barrel discount.
Sources said the subsidy payout by ONGC, GAIL and OIL would fall in the second half of current fiscal as crude oil prices had come down substantially.
Upstream firms ONGC, GAIL and OIL were to pay Rs 24,000 crore (Rs 240 billion) subsidy out of the Rs 73,500 crore (Rs 735 billion) under-realisation on selling petrol, diesel, LPG and kerosene estimated for the fiscal.
But with crude oil falling by over $10 a barrel from the $67 a barrel average taken to calculate the Rs 73,500 crore (Rs 735 billion) figure, the under-realisation is now estimated at Rs 57,000-60,000 crore (Rs 570-600 billion), sources said.
This reduction would translate into proportionate reduction in upstream's share and oil bonds issued by the government. The government had originally estimated issue of Rs 28,300 crore (Rs 283 billion) worth of oil bonds.
