Government will pay fuel retailers Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL) and Hindustan Petroleum Corp (HPCL) Rs. 11,000 crore in subsidy for the first quarter.
Fuel retailers sell diesel, domestic LPG and kerosene at government controlled rates which are below market price. The loss they thus incur is made good through cash subsidy from the government and dole from upstream firms like ONGC.
“For April-June the government has sanctioned Rs. 11,000 crore subsidy,” an official said on Monday.
Of this, IOC will get Rs. 6,076 crore, BPCL Rs. 2,407 crore and HPCL Rs. 2,517 crore.
During April-June, the three fuel retailers cumulatively lost Rs. 28,690.74 crore on the three fuel. Of this, the upstream firms ONGC, Oil India Ltd (OIL) and GAIL have been asked to meet Rs. 15,546.65 crore or 54 per cent of the under-recovery or revenue loss.
After accounting for government cash subsidy, fuel retailers are still left with about Rs. 2,145 crore of unmet losses.
Of the upstream share, ONGC has been asked to chip in Rs. 13,200.10 crore. This is 4.5 per cent higher than Rs. 12,622 crore it had paid in first quarter of previous fiscal, he said.
OIL has been asked to provide Rs. 1,846.55 crore while the share of gas utility GAIL has been fixed at Rs. 500 crore.
The official said out of the upstream dole, IOC will get Rs. 8,107.21 crore, BPCL Rs. 3,830.56 crore and HPCL Rs. 3,608.88 crore.
Of the Rs. 28,690.74 crore revenue loss in April-June, fuel retailers lost Rs. 12,129 crore on domestic LPG, Rs. 9,037 crore on diesel and Rs. 7,524 crore on kerosene sold through PDS.
Oil firms are currently losing Rs. 1.33 a litre on diesel, Rs. 32.98 on PDS kerosene and Rs. 447.87 crore on domestic LPG, he said, adding at the current rate the three firms are likely to end the fiscal with an under-recovery of Rs. 91,665 crore.
IOC lost Rs. 15,328.34 crore on sale of the three products in Q1, HPCL Rs. 6,620.01 crore and BPCL Rs. 6,742.39 crore.
Last fiscal, oil firms had lost Rs. 1,39,869 crore on sale of diesel, PDS kerosene and domestic LPG.