Subsidies to cost ONGC Rs3497 crore in third quarter

State-owned Oil and Natural Gas Corp, India's largest oil and gas producer, will bear a Rs3,497 crore burden on account of fuel subsidies in the third quarter ended 31 December, 2009, according to a report.

The petroleum ministry has divided the Rs4,361 loss made by oil marketing companies or retailers on selling petrol and diesel during October-December between ONGC, gas utility GAIL India and producer Oil India Ltd.

News agency PTI quoted an unnamed petroleum ministry official as saying, "The retailers lost Rs4,361 crore in October-December quarter on sale of petrol and diesel." Of this, ONGC will pick up Rs3,497 crore, while OIL will foot Rs467 crore. GAIL Rs397 crore.

ONGC, GAIL and OIL give discounts on crude oil and petroleum products like LPG to retailers Indian Oil, Bharat Petroleum and Hindustan Petroleum to make up for the losses on selling auto fuel below cost.

IOC, BPCL and HPCL are projected to lose Rs47,400 crore on selling petrol, diesel, LPG and kerosene below cost this fiscal. They may lose about Rs30,000 crore on cooking fuel, of which the finance ministry has agreed to give Rs12,000 crore in cash to the retailers.

The three firms currently lose Rs5.42 a litre on petrol, Rs3.65 a litre on diesel, Rs17.23 a litre on kerosene, and Rs299.01 on domestic cooking gas cylinders.