ONGC forced to take $16/barrel hit on crude sales

New Delhi, July 15 | Updated: Jul 16 2005, 05:30am hrs
Oil and Natural Gas Corporations (ONGCs) contribution of Rs 2,876 crore towards sharing the under-recoveries of the oil marketing companies (OMCs) during the first quarter of this fiscal would result into a loss of $16 on every barrel of crude oil sold by it to OMCs.

Speaking to FE, a senior ONGC official said, Currently, our realisation on every barrel of oil is around $52. An outgo of Rs 2,876 crore means that we will have to offer a discount of around $16 per barrel and our average realisation will come down to $36 a barrel. This is almost the same as our realisation in the first quarter of the last fiscal.

However, the exact discount figures are presently being worked out by the Petroleum Planning and Analysis Cell (PPAC), he said.

Interestingly, while both ONGC and OIL have been directed to share part of the subsidy burden of OMCs on sales of all four products including petrol, diesel, LPG and kerosene, the government has spared GAIL from sharing the under-recoveries on sales of petrol and diesel.

GAILs share of Rs 153 crore includes Rs 101 crore as its contribution towards sharing the subsidy on kerosene and Rs 52 crore for LPG.

However, ONGCs share of Rs 2,876 crore, will have Rs 1,344 crore towards subsidy on LPG and kerosene and Rs 1,532 crore for meeting the under-realisations on petrol and diesel.

Similarly, Oil India Limited (OIL) has been asked to foot a subsidy bill of Rs 228 crore which includes a contribution of Rs 107 crore towards the under-realisations on LPG and kerosene sales and Rs 121 crore towards the subsidy on petrol and diesel. However, during 2004-05, even ONGC and OIL had shared losses only on LPG and Kerosene.

Out of the upstream companys share of Rs 3,257 crore, IOC is expected to get around Rs 1,600 crore, IBP around Rs 200 crore and HPCL and BPCL around Rs 800 crore each.

ONGC has been the hardest hit as its share in the subsidy sharing formula has gone up substantially, by around 300% - from Rs 797 crore in first quarter of 2004-05 to Rs 2,876 crore this year.