New Delhi, Aug. 3: The government will give Rs 14,000 crore in cash to Indian Oil, Bharat Petroleum and Hindustan Petroleum to make up for the losses incurred on selling fuel below cost in the first quarter of 2010-11 fiscal.
The finance ministry on Tuesday sought parliamentary approval for additional spending of Rs 68,294.30 crore that included Rs 14,000 crore “for providing compensation to oil marketing companies towards estimated under-recoveries on account of sale of petroleum products.”
Retailers IOC, BPCL and HPCL lost about Rs 20,275 crore on selling petrol, die-sel, domestic LPG and kerosene below cost in Q1FY11. Of these, losses of upstream firms like ONGC, made up for one-third or Rs 6,690.7 crore.
The finance ministry will meet the rest by way of cash dole-outs after the Parliament passes supplementary demands for grants.
IOC, BPCL and HPCL had reported net losses in April-June quarter, as the subsidy did not come before accounts for the quarter were closed.