The government has decided to give Rs 38,500 crore as subsidy to oil companies who have been suffering heavy losses due to the increase in the prices of global crude oil and their inability to raise the domestic prices in tandem with it. The additional compensation will take the total subsidy payout to oil companies for the last fiscal to Rs 83,500 crore.
This subsidy is being provided for the fourth quarter of the last fiscal and is in addition to the Rs 45,000 crore already provided for the first nine months. However it is much lesser than the Rs 49,000 crore which the Petroleum Ministry had been asking for.
Amongst the oil companies Indian Oil Corporation will get Rs 20,861 crore, Hindustan Petroleum Corporation Rs 8,486 crore, and Bharat Petroleum Corporation shall receive Rs 9,153 crore. With this addition, the government have shared about 60% of the Rs 138,500 crore loss incurred by the oil marketing companies.
The upstream oil companies - ONGC, Oil India and GAIL (India) are expected to pitch in an additional Rs 18,106 crore taking its contribution to Rs 55,000 crore for the fiscal. These companies have already given out Rs 36,894 crore towards fuel subsidy. With the addition, the share of upstream companies in the total compensation works out to be 39.7% in 2011-12, up from 36.7% in the previous year.
The amount of Rs 55,000 crore will be split between the three oil companies as Indian Oil Corporation -Rs 29,961 crore, Bharat Petroleum Corporation- Rs 12,951 crore and Hindustan Petroleum Corporation -Rs 12,082 crore.
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