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Govt exempts ONGC, Oil India from payment of fuel subsidy in Q4

The government has exempted oil producers ONGC and Oil India from payment of fuel subsidy in Q4 as the finance ministry has agreed to compensate the revenue loss on fuel sales.

Mail Today Bureau        Last Updated: April 17, 2015  | 09:28 IST
Govt exempts ONGC, Oil India from payment of fuel subsidy
Photo: Reuters

The government has exempted oil producers ONGC and Oil India from payment of fuel subsidy in the fourth quarter as the finance ministry has agreed to compensate the revenue loss on fuel sales.

The ministry this week, in a letter to the oil ministry, said it will pay Rs 5,324 crore in fuel subsidy for the January-March quarter, effectively meeting all of the revenue retailers lost on selling domestic LPG and kerosene at subsidised prices.

The government regulates price of cooking fuels LPG and kerosene to cushion consumers from high international prices.

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.

Under-recoveries, or revenue retailers' loss on selling fuel below cost, of Rs 67,091 crore in first nine months of the fiscal were fully accounted for by the subsidy support and dole out from upstream firms like ONGC.

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