FinMin Sanctions Rs. 5,223-Cr Fuel Subsidy For IOC, BPCL
By PTI
NEW DELHI: The Finance Ministry has sanctioned Rs. 5,223 crore fuel subsidy for the January-March quarter to cover almost all of the revenue loss that the two retaileRs. suffered on selling domestic cooking gas (LPG) and kerosene at government rates.
Sources said that out of the subsidy sanctioned, IOC will get Rs. 2,932.62 crore and BPCL the remaining Rs. 2,291 crore.
HPCL, they said, will not get any subsidy due to certain adjustments for the past payments.
With this, the total subsidy provided by the government in 2014-15 goes up to Rs. 27,308 crore. For the first three quarters, the government had provided Rs. 22,085 crore.
The fuel retailed Rs. had lost a total of Rs. 72,314 crore on selling diesel (up to October 17), LPG and kerosene at government rates, which were way below cost in 2014-15.
Sources said upstream oil produce Rs. ONGC, Oil India and GAIL have been exempted from paying any subsidy in Q4.
The government regulates price of cooking fuels LPG and kerosene to shield the poor. The difference between the cost and the retail selling price is borne by the government by way of cash subsidy and upstream produceRs. like ONGC.
Most of the under-recoveries, or revenue retailers' loss on selling fuel below cost, of Rs. 67,091 crore in the first nine months of the fiscal were accounted for by the subsidy support and dole out from upstream firms like ONGC.
In the first nine months, the government gave cash subsidy of Rs. 22,085 crore to meet less than a third of the under-recoveries on cooking fuel and diesel (up to October 17).
Upstream oil produceRs. ONGC, OIL and GAIL chipped in with Rs. 2,822 crore.
Sources said there was an unmet under-recovery of Rs. 2,184 crore for the April-June quarter which the finance ministry has so far not agreed to meet.
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