Apart from Oil and Natural Gas Corporation (ONGC), the government is also looking selling stake in other public sector oil companies like Oil India Limited (Oil) and GAIL (India) Limited to raise funds for reducing the fiscal deficit. Union finance minister Arun Jaitley discussed the issue with oil minister Dharmendra Pradhan at a meeting in the national capital on Thursday.
The government had decided to sell five-per cent stake in ONGC to raise Rs 17,000-Rs 18,000 crore. However, its stock price has come down due to the sharp decline in global oil prices and the earlier uncertainty over the petroleum products subsidy burden the company has to share with the government. The scrip plummeted from Rs 472 last June to Rs 341.60 on Thursday. At the current price, the government will be able to raise only Rs 15,000 crore.
Pradhan, however, said that he is hopeful of getting a good price for ONGC as the government is reworking the subsidy sharing formula.
The Department of Disinvestment will take a call on timing of divestment of ONGC, Pradhan told reporters after the meeting.
The oil ministry wants ONGC and Oil's share of the subsidy burden for LPG and kerosene to be reduced to the extent of the statutory oil cess that the two companies pay.
The cess this fiscal will work out to be Rs 10,500 crore. ONGC and Oil have already paid Rs 31,926 crore in fuel subsidy in the first half of this fiscal and if the ministry proposal is accepted, their payout in remainder of FY15 will be no more than Rs 8,000 crore. Upstream producers like ONGC met nearly half of the revenue loss that fuel retailers incurred on selling cooking fuel and diesel until recently at government-controlled rates.