Union finance ministry agreed to release Rs 25,000 crore as compensation to state-run oil marketing companies – Indian Oil, Bharat Petroleum and Hindustan Petroleum- for selling diesel, cooking gas (LPG) and kerosene at subsidised prices.
The finance ministry gave a comfort letter to the OMCs intimating its plan to release the amount. However, the actual release of the amount would happen after Parliament has approved the supplementary demands for grants in the forthcoming Budget session.
While Indian Oil would receive Rs 13,474.56 crore, BPCL is entitled to Rs 5,987.25 crore and HPCL Rs 5,538.19 crore from the total amount. It may be noted that the government earlier released Rs 30,000 crore in subsidy to the oil firms in the first two quarters.
IOC, BPCL and HPCL sell diesel at a discount of Rs 9.22 every litre, kerosene at a discount of Rs 31.6 per litre and LPG cylinder at a discount of Rs 481, and in the process lose a whopping Rs 443 crore per day.
The three state-run OMCs are estimated to have incurred Rs 39,268 crore under-recovery during the third quarter (October-December 2012). Of this, Rs 15,000 crore will paid by upstream PSUs Oil & Natural Gas Corp (ONGC), GAIL and Oil India. Upstream PSUs have paid Rs 45,000 crore in the first three quarters as subsidy to the oil marketing PSUs.