ET reported that petroleum ministry wants INR 56,600 crore more in cash subsidy to partially compensate the state owned oil firms for losses they incur on selling fuel below cost.

The subsidy sought is over and above the INR 30,000 crore assistance already promised by the Finance Ministry for the first half of the current fiscal.

Oil Secretary Mr GC Chaturvedi told reporters that "At the current rates, under recoveries (revenue loss) of oil marketing companies in the current fiscal is likely to be of the order of INR 1,30,000 crore.”

The Oil Ministry wants the share of upstream companies like ONGC, which gives discounts on crude oil they sell to refiners to make up for a part of the loss on fuel sales, to be limited to one-third of this revenue loss, or INR 43,329 crore.

He added that "We would like their share to be one-third. The rest we want the Finance Ministry to bear.”

In first two quarter of the current fiscal, upstream firms Oil and Natural Gas Corp, Oil India and GAIL bore one third of the INR 64,900 crore under-recovery on fuel sale.

The Finance Ministry gave INR 30,000 crore and the rest was borne by refiners, Indian Oil, Bharat Petroleum and Hindustan Petroleum.

In the April to September period, the three firms lost INR 64,900 crore on selling the three fuels below cost.

(Sourced from ET)