ONGC's subsidy burden to be reduced before stake sale

India is considering reworking the subsidy-sharing formula for Oil & Natural Gas Corp, petroleum minister Dharmendra Pradhan said today.

ONGC's subsidy-sharing burden may be reduced to boost the state-run explorer and producer's profits, Pradhan told parliament without giving details.

ONGC, nearly 69-per cent owned by the government, has seen profits decline due to the sale of crude oil to state-run refiners at discounted rates.

India does not regulate prices of petrol and diesel any longer, but state-owned companies are forced to discount prices of other common fuels such as kerosene and cooking gas to keep a lid on retail prices.

Any move to lessen its discount burden will be favoured by investors as the government plans to sell a 5-per cent stake, worth about $2.5 billion, in ONGC as part of its divestment programme.