Subsidy burden becoming backbreaking, says ONGC

PTI Posted online: Friday, Nov 22, 2013 at 0000 hrs
Kolkata : Oil and Natural Gas Corporation Ltd (ONGC) has said subsidy burden is now almost becoming backbreaking, hinting subsidy bill for the upstream oil and gas major may swell.

"Subsidy burden is now almost becoming backbreaking. They are saying that this year's burden (combined) will be around Rs 1,40,000 crore," ONGC Chairman and Managing Director Sudhir Vasudeva said last evening when asked about subsidy and under-recovery situation.

Speaking on the sidelines of Institute of Chartered Accountants (ICAI) annual conference in city, he said, "ultimately what is important is how much the government is looking to take the burden. If the government passes everything to us, then what happens?"

ONGC's subsidy during first half of the current fiscal had been to the tune of Rs 23,400 crore, Vasudeva said.

Due to weak rupee and rising crude price, the overall underrecovery for oil marketing companies (OMCs) in the current financial year may touch Rs 1,40,000 crore from Rs 80,000 crore as pegged in the beginning of this fiscal.

Speaking about the the MoU with Petrovietnam in which it was offered 5 blocks to ONGC Videsh, Vasudeva said, "Now the blocks have been offered. Unless we see the blocks, the size, the prospectivity etc. nothing can be said on projected investment in these blocks."