Rs 10 per litre hike in diesel, kerosene if OilMin proposal okayed

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The price hike is being considered as the govt tries to find ways to meet the loss of Rs 160K cr deficit. (Reuters) The price hike is being considered as the govt tries to find ways to meet the loss of Rs 160K cr deficit. (Reuters)
SummaryPrice hike is being considered to find ways to meet loss of Rs 160K cr deficit this fiscal.

way below their cost. Of this, the bulk Rs 52,711 crore was on account of losses on diesel.

The government has promised a cash support of Rs 30,000 crore to cover a part of the Rs 85,586 crore revenue loss on fuel sales during April-September. Upstream oil firms like ONGC have chipped in Rs 30,170 crore, leaving a balance Rs 25,417 crore uncovered, he said.

The Oil Ministry, he said, wants Finance Ministry to make up for this shortfall as well as the revenue deficit expected in the remaining six months of current fiscal.

In all, the Oil Ministry has sought Rs 105,525 crore from the Finance Ministry this fiscal to subsidise diesel and cooking fuel.

State-owned fuel retailers are likely to end the fiscal with a revenue loss of over Rs 1,63,000 crore on sale of diesel, domestic cooking gas (LPG) and kerosene at government- controlled rates that are way lower than cost.

Of this, close to Rs 60,000 crore will come from upstream companies Oil and Natural Gas Corp (ONGC), Oil India Ltd and GAIL India. For the rest, the Oil Ministry has asked the Finance Ministry to give cash subsidy.

Upstream firms ONGC, OIL and GAIL share a part of the revenues that retailers lose on diesel and cooking fuel sales. Their share to begin with was 33 per cent of the revenue loss on fuel sales but has slowly risen to 40 per cent.

The source said upstream firms had in 2011-12 made good 40 per cent of the Rs 138,541 crore revenue that Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum Corp lost on fuel sales.

Their Rs 55,000 crore contribution that year compared to Rs 30,297 crore in 2010-11 and Rs 14,430 crore in 2009-10.

In 2011-12, the government gave out Rs 83,500 crore by way of cash subsidy, up from Rs 41,000 crore in 2010-11 and Rs 26,000 crore in 2009-10, he added.

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