Oil retailers wangle Rs8,000-cr subsidy

The finance ministry on Monday approved a Rs8,000-crore subsidy to the country's three oil marketing companies (all state-owned) to compensate half the revenues they lost on selling diesel, domestic cooking gas (LPG) and kerosene below cost for the quarter ending 31 December.

Indian Oil Corp (IndianOil) will get Rs4,442.45 crore, Bharat Petroleum Corporation Ltd (BPCL) Rs1,809.85 crore and Hindustan Petroleum Corporation Ltd (HPCL) Rs1,747.70 crore in cash subsidies from the government, petroleum minister S Jaipal Reddy told reporters in New Delhi.

The ministry of petroleum and natural gas had earlier sought Rs 10,000 crore from the finance ministry.

The move comes after the three fuel retailers deferred declaring their results as they were in the red due to mounting under-recoveries.

IndianOil had postponed its third quarter results from 25 January to 10 February. Similarly, BPCL has postponed the 31 January board meeting for the third quarter results to 9 February while HPCL has postponed its 27 January meeting to 11 February.

''The finance ministry has intimated to us that it has given Rs8,000 crore towards under recoveries for the third quarter of 2010-11. This will mean a total assistance of Rs21,000 crore in the current fiscal,'' said Reddy.