Category : Industry
Date : Aug-13-2010 12:46
The ministry of Petroleum has sought another INR 13,381 crore compensation for the Oil Marketing Companies (OMCs) from the Ministry of finance. Funds have been sought to meet the under recoveries of the public sector OMCs for selling petroleum products below market prices during the Q1 of 2010-11.Confirming the development minister of state for petroleum and natural gas Mr. Jitin Prasada said, “The Finance Ministry has been requested to provide financial support of INR 13,381 crore for meeting the balance under recoveries incurred by the OMCs during the first quarter of 2010-11.” Further it is worth noting that the total under recovery for 2009-10 was INR 46,051 crore. Out of this the three OMCs Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation have recently received INR 14,000 crore from the Government as balance cash compensation on subsidised sale of fuel for the financial year 2009-10. Elaborating further on the matter Mr. Prasada pointed out that one third of the total under recovery of INR 20,072 crore on sale of petrol (up to June 25), diesel, PDS kerosene, and domestic LPG for April-June 2010-11 would be compensated by upstream oil companies ONGC, Oil India Ltd and GAIL (India) through price discounts on crude and products. As per the burden sharing mechanism the upstream oil companies will have to shell out a compensation of INR 6,690.68 crore to the OMCs for the quarter ended June 30. It is further worth noting that during the first quarter of FY11, the under recoveries incurred by the three OMCs on selling domestic LPG and PDS kerosene is INR 5,098 crore and INR 10,119 crore respectively.Further adding to the matter Mr. Prasada said, “It was decided in the meeting of the Empowered Group of Ministers held on June 25 that the burden sharing mechanism for 2010-11 will be decided by the Ministry of Petroleum and Natural Gas in consultation with the Finance Ministry.”Meanwhile it is worth noting that the projected under recoveries for the full financial year 2010-11 are close to INR 57,000 crore. On the other hand due to the compensation from the Government for selling the products at a controlled price not coming before the accounts were closed, the three OMCs had reported net losses in the first quarter. For the first quarter, ONGC has shouldered INR 5,515.54 crore, Oil India INR 729.66 crore and GAIL INR 445.48 crore.
Date : Aug-13-2010 12:46
The ministry of Petroleum has sought another INR 13,381 crore compensation for the Oil Marketing Companies (OMCs) from the Ministry of finance. Funds have been sought to meet the under recoveries of the public sector OMCs for selling petroleum products below market prices during the Q1 of 2010-11.Confirming the development minister of state for petroleum and natural gas Mr. Jitin Prasada said, “The Finance Ministry has been requested to provide financial support of INR 13,381 crore for meeting the balance under recoveries incurred by the OMCs during the first quarter of 2010-11.” Further it is worth noting that the total under recovery for 2009-10 was INR 46,051 crore. Out of this the three OMCs Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation have recently received INR 14,000 crore from the Government as balance cash compensation on subsidised sale of fuel for the financial year 2009-10. Elaborating further on the matter Mr. Prasada pointed out that one third of the total under recovery of INR 20,072 crore on sale of petrol (up to June 25), diesel, PDS kerosene, and domestic LPG for April-June 2010-11 would be compensated by upstream oil companies ONGC, Oil India Ltd and GAIL (India) through price discounts on crude and products. As per the burden sharing mechanism the upstream oil companies will have to shell out a compensation of INR 6,690.68 crore to the OMCs for the quarter ended June 30. It is further worth noting that during the first quarter of FY11, the under recoveries incurred by the three OMCs on selling domestic LPG and PDS kerosene is INR 5,098 crore and INR 10,119 crore respectively.Further adding to the matter Mr. Prasada said, “It was decided in the meeting of the Empowered Group of Ministers held on June 25 that the burden sharing mechanism for 2010-11 will be decided by the Ministry of Petroleum and Natural Gas in consultation with the Finance Ministry.”Meanwhile it is worth noting that the projected under recoveries for the full financial year 2010-11 are close to INR 57,000 crore. On the other hand due to the compensation from the Government for selling the products at a controlled price not coming before the accounts were closed, the three OMCs had reported net losses in the first quarter. For the first quarter, ONGC has shouldered INR 5,515.54 crore, Oil India INR 729.66 crore and GAIL INR 445.48 crore.
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