India's largest oil producer Oil and Natural Gas Corp, gas utility GAIL and exploration firm Oil India Ltd will pay Rs 3,246 crore (Rs 32.46 billion) to oil marketing firms to partly cover the losses they made in April-June on selling petrol, diesel, LPG and kerosene below the cost.
ONGC will pay Rs 2,876 crore (Rs 28.76 billion), GAIL (India) Rs 150 crore (Rs 1.50 billion) and OIL Rs 220 crore (Rs 2.20 billion) to cover one-third of the about Rs 9,800 crore (Rs 98 billion) revenue loss Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp suffered on selling fuel in the first quarter of current fiscal, a senior official said.
Of the Rs 3,246 crore contribution by upstream firms, IOC would get around Rs 1,625 crore (Rs 16.25 billion), while BPCL and HPCL would get about Rs 810 crore (Rs 8.10 billion) each.
"Till last year, upstream firms shared losses only on LPG and kerosene but this year they have been asked to foot even under-realisation on petrol and diesel," the official said.
ONGC's share in the informal subsidy sharing arrangement has risen more than 300 per cent -- from Rs 940 crore (Rs 9.40 billion) in first quarter of 2004-05 to Rs 2,876 crore this year.
For the 2004-05 full fiscal, ONGC had paid a subsidy of Rs 4,104 crore (Rs 41.04 billion) -- up 53 per cent from Rs 2,690 crore (Rs 26.90 billion) in 2003-04 -- to oil refining and marking PSUs by way of incremental discount on crude prices. This pulled down the net profit by Rs 2553.20 crore (Rs 25.532 billion) to Rs 12,983 crore (Rs 129.83 billion).
"ONGC has gained from the spiralling crude oil prices. It got $51-52 per barrel on crude it produced in April-June this year as against $39 a barrel last year," the official said.
In 2004-05, ONGC, GAIL and OIL had borne around Rs 5,900 crore (Rs 59 billion) of LPG and Kerosene subsidy.
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