Oil ministry seeks cash subsidy of Rs. 105,525 crore for FY13.

New Delhi: The Oil Ministry has sought Rs. 105,525 crore from the Finance Ministry this fiscal to subsidise diesel and cooking fuel, the Lok Sabha was informed today.

State-owned fuel retailers are likely to end the fiscal with a revenue loss of over Rs. 1,63,000 crore on sale of
diesel, domestic cooking gas (LPG) and kerosene at government-controlled rates that are way lower than cost.

Of this, close to Rs. 60,000 crore will come from upstream companies Oil and Natural Gas Corp (ONGC), Oil India Ltd and GAIL India.

For the rest, the oil ministry has asked finance ministry to give cash subsidy.

"An amount of Rs. 105,252 crore has been sought by Ministry of Petroleum and Natural Gas at the time of revised estimates (RE) 2012-13 for compensation of oil marketing companies in respect of under recovery (loss) on sale of the sensitive oil products," Minister of State for Finance Namo Narain Meena said in a written reply to a question in Lok Sabha.

In response to a separate question, Minister of State for Petroleum and Natural Gas Panabaaka Lakshmi said the government has promised a cash support of Rs. 30,000 crore to cover a part of the Rs. 85,586 crore revenue loss on fuel sales during April-September.

Upsteram oil firms gave Rs. 30,170 crore, leaving a balance Rs. 25,417 crore uncovered, she said.

State retailers currently lose Rs. 10.19 per litre on diesel, Rs. 32.87 a litre on kerosene and Rs. 478.50 per 14.2-kg subsidised LPG cylinder.

"The subsidy requirement for the current year is projected keeping in view the comparatively high prices of
crude oil in international market and depreciation of rupee against USD," Meena said.

Upstream firms ONGC, OIL and GAIL share a part of the revenues that retailers lose on diesel and cooking fuel sales.

Their share to begin with was 33 per cent of the revenue loss on fuel sales but has slowly risen to 40 per cent.

Lakshmi said upstream firms had in 2011-12 made good 40 per cent of the Rs. 138,541 crore revenue that Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum Corp lost on fuel sales.

Their Rs. 55,000 crore contribution that year compared to Rs. 30,297 crore in 2010-11 and Rs. 14,430 crore in 2009-10.

In 2011-12, government gave out Rs. 83,500 crore by way of cash subsidy, up from Rs. 41,000 crore in 2010-11 and Rs. 26,000 crore in 2009-10, she said.


Source : profit.ndtv.com